The dollar is outpacing other major currencies
The US dollar is on the front foot during early Thursday trading, following the publication of the minutes for the last FOMC meeting, which coincided with the release of US private sector employment data. The minutes revealed that Fed officials discussed raising rates earlier than previously expected, while the payroll data for the private sector was also positive. With the labor market showing signs of vitality and central bank policy setters discussing the possibility of accelerating the pace of tightening, it’s no wonder Treasury yields are surging as investors price-in the enhanced hawkishness of the Fed, in a dynamic that could entail further gains for the greenback.
Gold prices are down during early Thursday trading, following the release of the minutes for the FOMC December meeting. The minutes revealed that Fed officials discussed the need to accelerate the pace of monetary policy tightening, with the markets moving immediately to price in the enhanced hawkishness of the American central bank, pushing Treasury yields higher, in a dynamic that resulted in dollar gains. So, despite the rise in the number of new COVID cases, a scenario that normally would support the precious metal due to its safe haven appeal, gold is facing the headwinds generated by a strong dollar as a result of the inverted correlation between the two assets.
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