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Still, the U.S dollar was all fired up, on the basis global investors were increasingly placing their bet on the U.S dollar amid reports showing resurging COVID-19 caseloads globally particularly in the Northern Hemisphere.

Dollar bulls have been riding fast in 2021 taking to account U.S Treasury yields strong rise had supported the U.S dollar and dampened demand on hard safe-haven assets like precious metals, although some currency traders pulled back some of their profits on macros revealing potential delays to President Joe Biden’s $1.9 trillion fiscal stimulus package.

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Currency traders are surprisingly on the day that holds the all-important FOMC meeting, focused more on fiscal policies like the $1.9 trillion stimulus plan facing strong resistance from high ranking Republicans rather than the expected U.S Fed statements printing ultra-low interest rates status quo will remain unchanged.

Dollar bears would be expecting the U.S Fed Chair Powell to mention no short term exit from their very easy policy stance, and that’s could give the bears enough gas to pull the dollar down momentarily.

Recent price action reveals the US dollar index (DXY) extends recovery moves while picking up the bids to 90.30 during early Wednesday.

The U.S Dollar Index gauge has been ranging between 90.132 – 90.282 at London’s trading session, meaning USD bulls could face obstacles for direction today alongside uncertain risk appetite.

In addition, Commodity currencies like the Canadian dollar have been trading firmer finding traction from impressive gains sighted in global equity markets and commodity markets.

This could print more upsides for the Loonie, particularly as the International Monetary Fund upgraded its forecast for 2021 yesterday disclosing it now expects the world’s economy to grow 5.5% this year, a 0.3% increase from October 2020’s forecasts.

For a look at all of today’s economic events, check out our economic calendar.
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