The USD Revival, was it sparked by the Capitol Chaos?
There appears to be an uncanny correlation between yesterday's chaos in DC and the USD. First, the greenback had one of the best days in recent weeks on Jan 7, following the National Guard's scrambling to squash an attempted insurrection that the media blames on the incumbent. Second, the US's political squabbling may come to an end and go a long way in helping reinject momentum to a recovering economy. Either way, the greenback could extend gains in coming weeks as mixed signals cause a split in investors feeding the USD, a currency that looks firm.
The USD is on the green, halting the Euro march despite good news from Germany on Jan 7. Altogether the greenback is firmer versus the majors, specifically after posting decent gains versus the yen. The revival follows a 10-month plunge as the coronavirus and political upheavals were ramming the economy. However, the power transition is around the corner, and further fiscal support may speed up recovery, bolstering USD bulls.
Impact on the USD:
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