Investing.com investing.com 11 Jan, 2021 06:30 am

Taper's The Latest Word; U.S.-Sino Frictions Rise; China COVID Lockdown

Taper's The Latest  Word; U.S.-Sino Frictions Rise; China COVID Lockdown
Market Overview Analysis by Stephen Innes covering: USD/JPY, XAU/USD, USD/CNY, USD/MYR. Read Stephen Innes's latest article on Investing.com

For the dollar, it might be a case of push and pull where risk-on sentiment and dollar-negative as capital is allocated elsewhere, versus the attraction of higher US yields over the short term.With the market not properly positioned for this trade, it could be a good way to bank 200 pips quickly USDASIA continues to retrace higher on higher US yields as are g-5 currencies.The US dollar's recent gains, higher yields, and the equities rally is keeping gold on the defensive.This glorious 10-month rally has been unilaterally supported by stimulus and Fed policy air balloons.

Indeed, this along with a touch of Fed policy uncertainty has triggered some profit taking out of the gates this morning.It appears this time is not different as investors now struggle to iron out if the triggered inflationary rise in nominal rise yields could be a precursor to a shift in Fed policy, which is the primary key for the US dollar.

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