US Dollar Rises for the Fourth Straight Sessions, the Longest since Election Day

For the first time in two months, the greenback rose for the fourth straight day on Jan 11, the longest run since early November when Americans went to the ballot to exercise their democratic rights. Two months later, and after sinking to a two-year low, the USD seems to be recovering. It may be the strongest gain in two months, a signal that the greenback's mojo is back. Already, the USD, Euro, and commodity-dependent currencies like the NZD and AUD are pulling back from around 2020 highs, slipping. These losses may continue in days ahead.

Details: 

Political headlines could dominate headlines this week following last week's storming of the Capitol, a controversy blamed largely on the President and said to be an attempted insurrection. The FED is cracking the whip, arresting protestors who breached and scaled security walls while Democrats are concurrently intensifying calls for the President to resign or get impeached. Concurrently, Pelosi is heaping more pressure on Pence, who is reluctant to use the 25th amendment to force Trump out before he hands over power. As this happens, the USD is ripping higher, especially against the Yen, following comments from Japan's Ministry of Finance. If these gains are sustained, it could be the longest run since September 2020. The contraction has been pinned to rising US yields, of which the 10-year note rose 10bps by close of last week. 

Impact on the USD: 

Bullish. The Greenback's gains could be part of a broader recovery following a 15 percent drawdown since mid-March. However, buyers will be in control, especially once key liquidation levels are overcome across major pairs in the medium term.

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