Greenback Has Georgia On Its Mind

DXY bounced off a fresh 33-month low and swung from losses to a gains in sync with U.S. Tsy yields as tight races for Georgia Senate seats grabbed attention. The greenback briefly showed atop the G10 pile as betting market odds flipped to favour the Dems, amid a growing perception that we may witness a "red mirage," with absentee ballots expected to play a key role after early results pointed to razor-thin leads for GOP candidates. The Cook Report and Decision Desk called the Warnock (D) - Loeffler (R) race for Warnock. Election matters overshadowed Sino-U.S. frictions, keeping most G10 crosses trapped within relatively tight ranges. USD corrected its earlier move ahead of the London morning, with DXY pulling back from highs.

• JPY was among the worst G10 performers, limited by Japanese MoF's jawboning. A ministry off'l stressed the importance of FX market stability, adding that the Ministry will monitor financial markets and remain in touch with the BoJ & FSA.
• The Antipodeans outperformed their G10 peers, but although AUD/USD and NZD/USD peeked above fresh cycle highs printed yesterday, they failed to make much headway beyond there.
• The yuan was happy to hug a tight range, leaving the prior day's extremes intact, as Caixin Services PMI released out of China was ignored.
• Per the minutes from the BoT's Dec MonPol meeting, Thai policymakers judged that the new coronavirus outbreak in Thailand may inspire some FX volatility, while warning that the baht will encounter challenges going forward.
• Flash German and French CPIs, U.S. ADP employment report & final durable goods orders, comments from BoE Gov Bailey & FOMC Dec MonPol meeting minutes, as well as further updates on Georgia runoff polls take focus from here.