Dollar at 1-month highs as markets eye Biden's FX policy; euro slips

Published On Dec 21, 2020

The US dollar strengthened for a third consecutive day on Monday to a four-week high as an undercurrent of risk aversion swept through currency markets, knocking the Australian dollar and the British pound lower.

With US markets shut for a holiday on Monday and Joe Biden set to be inaugurated as the next US president on Wednesday, major currencies remained within well-worn ranges, watching carefully the new administration's stance on the greenback.

While outgoing President Donald Trump has publicly railed against the dollar's strength for years, Janet Yellen, Biden's pick to take over the US Treasury, is expected to make clear that the United States does not seek a weaker dollar, according to the Wall Street Journal.

Moreover, Biden's plan for a $1.9 trillion stimulus package has also fuelled a broad-based rise in US Treasury yields and reversed a late 2020 fall in the value of the greenback.