Risk FX gains

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    TOKYO- Risk-sensitive currencies gained on Tuesday as investors breathed easier after US President Donald Trump accepted the start of a transition to a Biden administration, that is expected to include former Federal Reserve Chair Janet Yellen as Treasury secretary.

    Trump gave the head of the General Services Administration the go-ahead to proceed with a transition to a government led by Presidentelect Joe Biden despite plans to continue with legal challenges.

    Democratic allies to the Biden campaign said Yellen is expected to be nominated to become Treasury Secretary, heartening investors as she has called for increased government spending to lift the economy out of a coronavirus induced recession. “One thing is for sure and that is there is unlikely to be as many Fed-Treasury spats,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

    “Those Fed lending facilities for municipal funding, the corporate bond market and Main Street will be coming back quickly after the December 31 expiration date.”

    Last week US Treasury Secretary Steven Mnuchin let some of the Fed’s lending programs expire at the end of this year, opening a feud with the Fed, which said those emergency facilities are important to support the economy.