The dollar falls before the announcement of the Federal Reserve

What you need to know for Wednesday, January 27:

The market mood was bitter early in the day, but improved during the European session, to the detriment of the US dollar. The dollar was lower against most major rivals, despite investors being cautious during the US session.

Wall Street posted a modest intraday advance, while US Treasury yields rose but remained near their weekly lows.

The BOJ published the minutes of its last meeting and said it will remain attentive to currency movements. In addition, the ECB expressed concern about the exchange rate and would study the impact of the ECB’s policy towards the Fed on it. The weakness of the dollar is becoming a concern, even though the economy has done quite well with the pandemic. Still, the latest macroeconomic figures from the country were generally disappointing.

The focus remains on US events, beginning this Wednesday with the Durable Goods Orders report and the Federal Reserve’s announcement on monetary policy.

Vaccines against the coronavirus remain in the eye of the storm, amid a delay in delivery. On a positive note, Pfizer announced that it will seek a booster dose, a day after Moderna announced the same. Meanwhile, Johnson & Johnson said it will release the coronavirus vaccine test data next week and that the company is very optimistic that they will release a very robust data set.

Commodity-related currencies performed best against the dollar, while GBP / USD flirted with the year’s high at 1.2745. The main pairs remained within familiar levels.

Commodities fell modestly, with gold closing the day at $ 1,851 an ounce and WTI at $ 52.50 a barrel.