Intraday Market Thoughts

Chart Look at USDX, Yields, Gold & Bitcoin

by Adam Button
Jan 12, 2021 18:55

USD posts its first daily decline in nearly a week as Fed members began to weigh in that any tapering of QE was far-fetched. Bullard was the first to do so. The Fed laid out a path at the start of the pandemic that forecast leaving rates at zero until 2024 but doubts are already creeping in.  Bond yields also eased off at 1.19% before posting their first pullback in 5 trading days. Ashraf told the WhatsApp Broadcast Group he sees EURUSD gaining to 1.2220s as the 10 yr plays out an a gravestone doji, before dissipating anew. Below is a chart on yields, gold, rea lyields, Bitcoin and USDX. 

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Chart Look at USDX, Yields, Gold & Bitcoin - Yields Usdx Gold Jan 12 2021 (Chart 1)

The ongoing rise in the US dollar corresponds with a change in tone at the Fed. The talk of doing more is done and hints of tightening have begun.

Bostic on Monday angled to give the Fed more flexibility, saying policymakers aren't 'locked into a paradigm' and that changes are possible to the playbook if the economy recovers faster.

The Fed is also grappling with a looming bump in headline inflation in Q2. Because of base effects, year-over-year price rises in the quarter will be high and likely above the Fed's target. Looking through that is understandable but the pressure on the Fed will mount.



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