Dollar kicks off 2022 with a yields-backed rise, mood remains up

2022年1月3日

Happy 2022 traders, the year has kicked off with the US dollar moving higher across the board. The greenback is advancing alongside 10-year Treasury yields, which are above 1.51% once again.
It is essential to note that the moves are limited, especially against the majors – as many financial centers remain off on Monday. One currency that stands out is the Canadian dollar – basically reversing its last-minute increase on Friday. The drop in USD/CAD was not related to any significant development.
The main theme in markets remains Omicron, with investors being optimistic about its lower severity and the chances of the world to overcome this covid wave – despite sky-high infection levels.
The second theme is inflation, but that will likely come to the fore only later in the week.
Trading in China's Evergrande has been suspended, and that serves as a reminder that Beijing is not done with letting its property sector reorganize. However, it does not impact S&P 500 futures.
Charted: EUR/USD retreats from the highs achieved on Friday, as the dollar gets back into its stride.
Profit-taking into the New Year holiday caused the greenback to close the last two weeks of 2021 in the negative territory.
With trading conditions normalizing on the first day of 2022, the dollar started to gather strength against its rivals with the US Dollar Index rising 0.25% in the early European session.
IHS Markit will release the final revision to the December PMI reading for Germany, the euro area and the US. December Construction Spending data will also be featured in the US economic docket.