minus academy faq plus academy faq Check in circle Apple Android Home Magnifer Calculator Mail Email Facebook Twitter RSS Linkedin Linkedin hollower Headphones Wechats Instagram Line Mail 2 Phone Phone 2 Minus Plus Arrow right Arrow left (variant 2) Arrow right (variant 2) Brand logo Brand logo not filled Hamburger Flag of the Hong Kong Flag of the US/GB Flag of the US/GB Flag of the US/GB Flag of the China Flag of the China Flag of the China (traditional) Flag of the Taiwan Flag of the Hong Kong Flag of the Spain Flag of the Russia Flag of the France Flag of the German Flag of the Portugal Flag of the Italy Flag of the Poland Flag of the Czech Flag of the Hungary Flag of the Sweden Flag of the Bulgarian Flag of the Finland Flag of the Lithuania Flag of the Denmark Flag of the Croatia Flag of the Estonia Flag of the Norway Flag of the Romania Flag of the United Arab Emirates Flag of the United Arab Emirates Flag of the Indonesia Flag of the Malaysia Flag of the Korea Flag of the Korea Flag of the Samoa Flag of the Vietnam Flag of the Thailand Flag of the Turkey Flag of the Japan Cross Cross large User Arrow down Arrow up Cube Info list Data comunication Clock Slash
Market News
Dollar bounced! Investor are keeping eyes on inflation risk

Dollar bounced! Investor are keeping eyes on inflation risk

17-02-2021 10:43

Stocks in Asia-Pacific were mixed on Wednesday as the market sentiment turns to be a bit cautious, following the moves stateside overnight. The Wall Street was mixed on Tuesday, of which the Dow edged 0.2% higher to a record close. However, the S&P 500 and the Nasdaq closed a bit lower, as the investors monitored the jump of the US bond yields.

The benchmark 10-year Treasury yield jumped to 1.32%, which is the highest level since Feb 2020. ZFX analyst Jacob Leung said that, it may be a “dangerous” signal. As the market is now believing a “true” global recovery, inflation risk would be a key concern among investors under such easing economic environment. And, if the inflation is back, it will limit the flexibility of Fed policy, and that’s why the dollar is bouncing back.

The dollar index is approaching 91 area on Wednesday as traders are betting “no more” massive stimulus from Fed. In the meantime, a possible acceleration in inflation pushes Bitcoin to $50,000 level for the first time. ZFX analyst Jacob Leung said that there is no doubt that now investors may consider cryptocurrencies are the better tools for hedging inflation rather than gold. Gold price dropped to $1790 level as the bond yields jumped.

The overall European stock markets were in red in early trading session. Global investors are still closely watching the latest moves in the Treasury yields after digesting all the market news and analysis. Analysts believe that the positive expectations in the market would drive “money” into the equities from the low-rate bonds. However, some are on the other hand struggling that the higher yields could prompt investors back to the bond markets, sparking selloff pressure of stocks.

ZFX analyst Jacob Leung said that, as mentioned before, traders expected “more” from Fed. If Fed cannot be too aggressive in QE, it may boost risk-aversion together with a stronger dollar. In addition, in the coronavirus front, another new variant would be a potential “bearish” to the whole market.


Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

ZFX (Zeal Capital Market) is an FCA & FSA licensed online Forex & CFD broker providing more than 100 products for Forexcommoditiesstock indices, and share CFDsOpen a trading account with min. USD 50 deposit and download our MT4 trading platform now!