Extending gains through Usd and dragging Gold …

In many respects familiar factors have shaped trade and market direction again, with the Dollar taking its cues from broad risk sentiment based on daily coronavirus updates and restrictive measures deployed to combat the spread including efforts to expedite the pace of vaccinations. On that note, while lockdowns and curfews have been effective in terms of slowing the surge of infections, hospitalisations and fatalities, supply shortages and delays in the delivery of drugs are an impediment, while uncertainty persists in respect of the more transmissible and even deadlier strains of COVID-19 that current vaccines might not offer protection against. Moreover, J&J’s eagerly awaited Phase 3 results have not provided the panacea hoped for as the 66% overall efficacy rate is considerably lower than others already approved, albeit in 1 shot rather than 2. Hence, the early 2021 optimism and bullish mood that propagated reflation, rotation and reopening trades has given way to realism and a more pragmatic view of the situation and near term outlook. However, retail accounts have emerged as a new force to be reckoned with after building long positions in stocks like GameStop that forced hedge funds and the more established equity proponents to liquidate shorts, with the reverberations spreading across Wall Street and well beyond. Indeed, excess volatility prompted platforms to take evasive action following technical outages, such as limits in certain shares and ramped up margins in others, with the upshot being that the retail community switched their attentions to commodities and precious metals instead. Silver was selected as the next GME and the while metal spiked to just shy of Usd 27/oz initially before extending gains through Usd 27.50 and dragging Gold up in its slipstream to top Usd 1875 at one stage. Back to the Buck, moderate selling for rebalancing and considerably less risk aversion has capped advances after the DXY staged a couple of attempts to reach 91.000, with the index now hovering just shy of 90.500 within a 90.896-079 range. For the record, US data and surveys have not really impacted even though encouraging to upbeat on balance, as the FOMC and Fed chair Powell stuck to caution and no foreseeable end to accommodation in sight or talk of tapering until substantial progress is made on employment and inflation.