XE Market Analysis: North America – Jan 08, 2021

The dollar’s correlative pattern with stock markets has inverted, with the currency now rising in step with rallying global stock markets. The catalyst for the change was the Democrat wins in the Georgia runoff elections, which heralds the prospect of much greater deficit spending and warranting higher growth expectations for the U.S. economy. U.S. Treasury yields have also spiked more than peers, and much more so in the case against JCB and Bunds, which appears to have offset implications for lower real interest rates and real yields from an anticipated higher inflation curve.