THE DOLLAR sold off today with a recovery in stocks today...

THE DOLLAR sold off today with a recovery in stocks today amid solid tech earnings which saw the index fall beneath the 90.50 handle again. The risk on tone was attributed to the retracement of the vol spike yesterday as hedge funds reentered equity longs, although stimulus talks, vaccine progress, earnings were added tailwinds, as was better than expected jobless claims; GDP was in line with expectations, while New Home Sales were slightly short. The dollar softness led to a firmer EUR, with consumer confidence data more encouraging as economic sentiment picked up above expectations, while the other metrics were better than feared. After recent sour reports/talk of a cut from the ECB, ECB’s Kazak said he sees no rate cut needed now and that other instruments are better suited, but the tool is not off the table if circumstances were to change. XAU and XAG were interesting, Silver caught a heavy bid on talk that the WallStBets crew were looking to take silver “to the moon”, which drove the metal price higher, which also supported gold; the moves were faded somewhat in latter trade. Cyclical currencies were firmer in fitting with the rebound in equity prices, there was outperformance in NZD although it failed to reclaim 0.72 at pixel time, while AUD just stopped short of 0.77 irrespective of another potential clash with China over trade following calls from the Chinese Iron and Steel body to reduce the country’s dependence on imported iron ore. CAD was flat against the buck as the risk on appetite failed to spur large gains in oil, hampering CAD gains. GBP reclaimed 1.37 amid the risk rally.