Risky currencies are growing

Risk-sensitive currencies are strengthening on Tuesday after incumbent US President Donald Trump agreed to begin the transfer of power to President-elect Joe Biden, and with the expected appointment of Janet Yellen as Finance Secretary.

Trump recommended that the Directorate of General Affairs of the Administration begin formal procedures for the transfer of power, although he did not abandon attempts to challenge the results in court.

In the meantime, sources close to Biden's election headquarters said that former Federal Reserve Minister Yellen may head the Finance Ministry. This news was well received by investors, as Yellen had previously called for increased public expenditure to overcome the coronavirus-induced recession.

Union Bank Chief Executive Officer Stephen Cummings said: "The only thing that can be said for sure is that the Ministry of Finance and the Federal Reserve are unlikely to argue as often as they do now".

The Australian dollar rose by 0.49% to $0.7321 and the currencies of emerging economies, including the Mexican peso and the South African rand, are growing by around 0.4%.

The pound rose 0.1% to $1.3336 and is close to its peak in 12 weeks in the hope that the UK and the European Union will enter into a trade agreement that will govern their relationship after Brexit.

The dollar index to a basket of six major currencies fell by 0.12% to 92,394.

The euro rose by 0.11% to $1,1853, the Japanese yen showed a similar slight rise and traded at 104.42 yen per dollar.

The yuan is trading weakly at 6.5835 on the mainland market and 6.5813 on the offshore market.