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Dollar hits four-week high ahead of Yellen hearing

Dollar hits four-week high ahead of Yellen hearing

The U.S. dollar index rose for a second straight session on Monday, resuming its rebound from its lowest level since April 2018 hit two weeks ago, after a report indicating the U.S. would not target a weak dollar. 

The dollar index traded higher at 90.88, the highest level in four weeks, after advancing over the past couple of week from a low of 89.15. 

A report by the Wall Street Journal indicated that Treasury Secretary Janet Yellen would affirm her country’s discipline not weaken the greenback to win a competitive edge in trade during, according to Biden transition officials familiar with her hearing preparation. 

Over the past two weeks, the dollar got support from the rising Treasury yields on prospects of massive fiscal stimulus after Democrats won the majority of both Chambers of the Congress. However, a slim majority in the Senate could hinder the approval of Biden’s fiscal plan, which includes additional $1400 checks to Americans affected by the pandemic.

Regarding the market sentiment, while the upbeat Chinese GDP figures, which showed the world’s second biggest economy expanded 6.5% in the fourth quarter from a year earlier, surpassing forecasts of 6.2% expansion, managed to improve the sentiment, still there are concerns form the elevating new corona cases worldwide. 

In China, more than 29 million are in lockdown as China reported more than 100 new cases for the sixth consecutive day, with 109 new cases for Sunday. 

Markets may witness a light trading by investors as U.S. equity and bond markets are closed on Monday for the Martin Luther King Jr. holiday.

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