It’s is a relatively quiet day on the news flow front on Tuesday, with risk-on sentiment dominating global financial markets. Major European indexes are now adding more than 1% while US stock index futures are edging lower along with Treasury yields as investors continue to monitor geopolitical developments, also awaiting fresh quarterly earnings due this week.
In recent trading, Exxon Mobil (NYSE:XOM) reported the largest profit in seven years, benefitting from high energy prices in the fourth quarter.
The company’s stocks will likely react positively to the results that exceeded Wall Street expectations. Meanwhile, the greenback stays on the defensive, losing ground across the market today. A retreat in Treasury yields coupled with an upbeat risk tone in equity markets keeps pushing the safe-haven dollar lower after the recent rally to fresh mid-2020 highs.
The yield on the benchmark United States 10-Year Treasury note slipped to 1.74% from the levels above 1.78% at the start of the week. The USD index briefly dipped to nearly a one-week low of 96.25 before trimming intraday losses in recent trading.
Still, short-term downside risks continue to persist as long as the prices stay below at least the 96.50 zone. In the broader picture, the outlook for the dollar remains bullish, however. As the buck has been easing since Monday, gold prices surged back above the $1,800 figure, flirting with the 200-DMA ahead of the opening bell on Wall Street.
The yellow metal remains fragile and vulnerable to fresh losses despite the bounce. Furthermore, the XAU/USD pair is yet to confirm recovery above $1,800 on a daily closing basis as profit-taking could bring the bullion back under pressure should the dollar continue to erase losses during the North American trading.