Holiday Thinned Session Gives Back Some of Monday's Moves

Risk appetite was boosted on Monday after U.S. President Trump signed off on the coronavirus relief bill, with liquidity thinned out in the festive season. The news that U.S. Pres-elect Biden is planning to invoke the Defense Production Act to boost the production of Covid-19 jabs lent further support to risk appetite. DXY pushed higher on Monday but has given back some of the move in Asia.

• GBP is up slightly in Asia, GBP/USD last up 20 pips at 1.3472. However, the move higher barely makes up any of the drop from Monday after the pair fell from highs of 1.3581. GBP has taken a hit and snapped a three day winning streak in the process, concerns over the impact of the last minute Brexit trade deal are weighing
• Commodity currencies have made up some of the drop from Monday, AUD/USD and NZD/USD both around 13 pips higher, but still some way off highs seen in Monday's session. The move lower on Monday tracked a decline in oil prices as markets weigh reduced future demand on renewed Covid concerns.
• USD/JPY is seeing rangebound trade, last down 4 pips at 103.76.
• The PBOC set USD/CNY at 6.5451, which has seen CNH weaken amid some U.S. dollar strength and factoring in some geopolitical tensions after China said it opposed the U.S.'s Taiwan assurance act which was signed on Sunday.