Riskoriented currencies including the Australian dollar and the euro rose on Tuesday after U.S. President Donald Trump accepted the start of a transition to a Biden regime, that may include former Federal Reserve Chair Janet Yellen as Treasury secretary.
The New Zealand dollar was among the major gainers, rising as much as 0.9 to a twoyear high of 0.6985, after the countrys government sought advice from the central bank on how it could help stabilise property prices, prompting investors to unwind some bets of more monetary easing.
Trump gave the head of the General Services Administration the goahead to proceed with a transition to a government led by Presidentelect Joe Biden despite plans to continue with legal challenges.
Democratic allies to the Biden campaign said Yellen is expected to be nominated to become Treasury Secretary, heartening investors as she has called for increased government spending to lift the economy out of a coronavirus induced recession.
That should be a positive appointment from the markets point of view, as she is expected to pursue conventional policies, Commerzbank strategists said in a daily note.
And as far as the fiscal package is concerned, she is likely to listen to the Feds demands and try and push a package as much as possible.
Yellen has called for the opening of fiscal spending taps to revive an economy wrecked by the coronavirus pandemic and would be the first person to head the Treasury, the Fed and the White House Council of…