FX Update: Modest weakness in the euro and yen

FX Update: Modest weakness in the euro and yen, along with a smidgen of firmness in the Canadian dollar, were pretty much the only directional themes among the main currencies in trading through to the early London interbank session. EUR-USD edged out a two-day low at 1.2136, which is 4 pips shy of the 24-day low that was seen earlier in the week. A lift in the 10-year U.S. T-note yield back above 1.1%, alongside the continued resonance of ECB Lagarde and Villeroy rhetorical shot across the bows of euro bulls, seems to have maintained EUR-USD's heaviness. U.S. yields had dropped back by a few basis points over the last couple of days after some Fed policymakers downplayed the prospect for tapering this year, though have now lifted again on a CNN report, citing two sources, that president-elect Biden will announce during a keynote speech later today a $2 tln stimulus package, which dwarfs the hitherto anticipated $1.3 tln size. If this proves to be correct, analysts may seen a bigger rise in yields, along with a bid for dollars. Elsewhere, Cable settled in the lower-to-mid 1.3600s, while EUR-GBP remained heavy, although above the two-week low that was seen at 0.8881 yesterday. USD-JPY, meanwhile, posted a two-day high at 104.19 on the back of a moderately softer Japanese currency, which saw AUD-JPY peg a six-day high, and CAD-JPY lift into one-month high territory. USD-CAD edged out a six-day low at 1.2677. Oil prices have settled after yesterday hitting new 11-month highs. Unexpected drawdowns in weekly U.S. crude inventories have underpinned oil prices this week. Stock markets in Asia and U.S. index futures have been buoyed by the CNN report on Biden's stimulus plans.