The dollar has extended a rebound on Monday, as sharp gains in U.S. yields and hopes for more stimulus to boost the world’s largest economy has pushed the currency further away from recent multi-year lows.
Many European countries are battling a surge in Covid-19 cases following the emergence of a new highly transmissible strain of the virus, racing to vaccinate their elderly, the most vulnerable members of society. Cases are also increasing globally, with mainland China seeing its biggest daily increase in more than five months, the country’s national health authority said on Monday.
EUR/USD last traded at $1.2181, after climbing as high as $1.2349 last week. GBP/USD dropped 0.6% to 1.3489, while USD/JPY was up 0.2% at 104.19.
Gold was down on Monday morning, following a slump of more than 4% during the previous session, over a strengthening dollar and U.S. Treasury yields that continue to remain elevated.
Oil prices weakened Monday amid concerns of declining fuel demand following a jump in new Covid-19 cases in China, the world’s second-largest consumer of crude. Still, prices remain above the $50 a barrel level, supported by Saudi Arabia’s surprise pledge last week to cut output by 1 million barrels per day for two months.
The economic data slate is largely empty Monday, therefore the broader market risk sentiment, along with the US bond yields should continue to play a dominant role.