The February contract surged to as high as 1124.6 before closing at 1118.3, up +2%. The USD set back in the beginning of the year with the dollar index dropping -0.4% to 77.52.The greenback declined against major currencies including the euro, the yen and the pound.
Strong economic data, rather than raising speculations about an earlier Fed rate hike, spurred demand for high-yield assets.
This situation may be temporary. The US employment report may surprise to the upside on Friday and again fuels expectations that the Fed will tighten the monetary policies earlier than previously scheduled - supportive for the dollar.
Over the past 2 years, the inverse correlation between USD and equity market was strong.
However, the link should weaken this year as investors will be focusing more on country-specific factors such as monetary and fiscal policies.
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