The dollar declined on Tuesday morning in Asia’s forex exchange and riskier currencies were boosted. This came as U.S. President-elect Joe Biden is set to nominate Janet Yellen as the Secretary of the Treasury.
By 10:02 PM ET or 2:02 AM GMT, the U.S. Dollar Index dropped 0.03% to 92.487. The dollar hit its lowest level since Sep. 1 overnight amid the emerging clarity from November’s U.S. presidential election.
However, should a conclusive break on the dollar index below support at around 92 occur, a potential fresh downturn is possible.
Yellen is a former Federal Reserve Chairman and will be Biden’s latest nomination to his cabinet. She has started hinting already at how she’ll tackle her role, calling for increased government spending to boost the economy.
The nominee for the Secretary of the Treasury often cited growing U.S. economic inequality. She often said that it is a threat to U.S. values and the country’s future.
This was news that some investors have welcomed.
MUFG Union Bank chief financial economist Chris Rupkey said that there are unlikely to be as many Fed-Treasury spats. He referred to those Fed lending facilities for municipal funding, the corporate bond market and Main Street. They will be coming back quickly after the December 31 expiration date, he added.
It was in reference to incumbent Treasury Secretary Steven Mnuchin’s shock decision during the previous week. That was to let some Fed lending programs expire at the end of the year.
The decision sparked a feud with the U.S. central bank, led by incumbent Chairman Jerome Powell. He argued that the programs were crucial in supporting the economy.
Incumbent U.S. President Donald Trump
Incumbent U.S. President Donald Trump has given a go-ahead to Emily Murphy of the General Services Administration. That was to proceed with assisting the Biden administration’s transition to government.
As the first steps towards acknowledging the election results, this also increased risk appetite.
Trump, however, is still bent on pursuing legal challenges over the same results.
On the COVID-19 Front
In conjunction with the University of Oxford, AstraZeneca is the latest company to report positive news for a vaccine. The AZD122 vaccine candidate met its primary endpoint in clinical trials. These took place in the U.K and Brazil.
The company said on Monday that preparations are underway to submit the data to authorities around the globe. That will be for conditional or early approvals.
In forex, the USD/JPY pair climbed 0.02% to 104.56. Japanese markets reopened after their national holiday on Monday. The yen was reversing a slip of around 0.6% during the previous session.
The USD/CNY pair dropped 0.11% to 6.5777.
The GBP/USD pair was up 0.05% to 1.3330. The pound stayed close to a near 12-week high against the dollar. That was over investor bets that the European Union and the UK will finally seal a Brexit trade deal soon.
Meanwhile, talks between the two parties continue this week, racing to beat the end-of-year deadline to reach a deal.