The US dollar appreciated for the third consecutive trading session on Monday, up from a four-week high amid a climate of risk aversion in the money markets, which pulled down rival currencies, including the pound and the euro.
Investors are awaiting comments from US Treasury Secretary-General Janet Yellen on the position of the future presidential administration on the dollar.
While President Donald Trump has vehemently spoken out against a strong dollar in recent years, the former Fed chairman is expected to stress that the Treasury will not seek currency depreciation and will support a course determined by market movements, according to information published on Wall Street sources Journal.
“The United States is not looking for a weaker currency to gain a competitive advantage. We will oppose attempts to do so by other countries,” according to remarks prepared by Yellen ahead of Tuesday’s Senate hearings.
The ICE Dollar Index, which tracks the dollar’s performance against six major currencies, appreciated to an intraday high of $ 90.94, the highest value since December 21st. Around 16:00 (Romanian time), the index was up 0.12% from Friday’s reference, at $ 90.86.
The euro fell to a one-and-a-half-month low of $ 1.2066 / unit, while the pound depreciated by 0.3% to $ 1.35.
The US currency is also supported by the new massive stimulus package announced by President-elect Joe Biden, worth $ 1.9 trillion. The announcement led to an increase in government bond yields and eased the selling pressure for the dollar, seen throughout the past year, with the currency beginning 2021 on an upward trajectory.
However, analysts remain cautious about the dollar’s short-term performance, and investors are still betting on the currency’s depreciation.
Hedge funds increased their net short positions per dollar to over $ 34 billion in the week ended January 12, the highest value since May 2011.