US dollar on the back foot today

US dollar on the back foot today

The US dollar is at the lows of the day in a broad slump that's headlined by cable breaking above 1.40 for the first time since April 2018.

The drop pokes a hole in the higher yields/higher dollar story and instead emphasizes that with the US economy roaring back and talk of another $3 trillion in spending, that there's better value in beaten down global assets. In particular, commodity producers like AUD could strongly benefit from reflation.

In terms of data today, it kicks off with another commodity country that's getting some currency love today. USD/CAD is flirting with 1.26 and Canadian December retail sales are due at the bottom of the hour. The consensus is a -2.6% reading and -2.4% for ex-autos. That's a low bar.

In the US, the Markit manufacturing and services PMIs are due at 1445 GMT and forecast at 58.8 and 58.0 respectively.

At 1500 GMT, we get existing home sales and comments from Rosengren. An hour later it's Barkin. Expect more of the 'temporary' talk on inflation. Afterwards, it goes quiet but we'll be watching the US stimulus front.

Update, add the Fed's Williams to the schedule at 1 pm ET (1800 GMT).