Dollar drops as investors await stimulus
The US dollar fell against most major rivals on Monday, as the market focused on the latest developments about the US second fiscal stimulus package to ease the coronavirus impact.
Federal Reserve Chairman Jerome Powell stated today that the Fed is open to collaborating with the private sector on the digital dollar, but the bank is not committed to launching it.
Powell warned that the central bank will face difficult monetary policy implications due to launching a digital dollar, and noted the importance of the US dollar in the global economy.
The Trump administration proposed a $1.8 trillion fiscal stimulus package in order to pave the way for an agreement with the US congressional leaders to mitigate the coronavirus impact, ahead of the November election.
The dollar index fell against a basket of currencies by 0.3% to 93.2 as of 19:38 GMT, after hitting a high of 93.7 and a low of 93.2.
The British Pound fell against the US dollar on Tuesday, despite progress in the Brexit talks between the United Kingdom and the European Union. Risk assets saw a huge sell-off move today, after US President Donald Trump's remarks to stop negotiation with the Democratic leaders in the US Congress about the second Covid-19 relief package. Earlier data showed that the UK's construction PMI rose to 56.8 points in August, beating forecasts of 54 points. The British Prime Minister Boris Johnson stressed the need to intensify the talks talks with the European Union to reach convergence and achieve an agreement that prevents no-deal Brexit. As of 21:00 GMT, GBP/USD fell 0.6% to 1.2909, after hitting a high of 1.3008, and a low of 1.2891.
The US dollar fell against a basket of major currencies Tuesday, to deepen losses for the second straight day, on profit-taking from a 2-month high, as demand for the US currency slowed amid hopes for a new stimulus package in the US, and ahead of the first US presidential debate in this election. The dollar index fell 0.3% to 93.98 points, after opening at 94.24, and hit an intraday-high of 94.30. The index fell 0.3% yesterday, on profit-taking from a 2-month high of 94.74 points hit on Friday The US dollar gained 1.6% during the past week, posting its third weekly gain in a month and the largest since March, as it shined as the best alternative investment, due to concerns about the global economy after several governments tightened their lockdown restrictions to curb the spread of the coronavirus. Hopes for a new fiscal stimulus in the US were renewed, after the Democratic Party unveiled a new draft for the Covid-19 relief bill worth $2.2 trillion, and House Speaker Nancy Pelosi said that a solution can be reached with the White House on another stimulus plan. Markets are also anticipating the upcoming US presidential debate between the US President and Republican candidate Donald Trump versus his Democratic rival Joe Biden, due later today.
The US dollar fell against a basket of major currencies on Tuesday, to deepen its losses for the third straight day, and hit a 1-week low, as demand slowed following the latest positive developments in the ongoing US political talks about the new Covid-19 aid package. The dollar index fell 0.3% to a 1-week low of 93.15 points, after it opened at 93.42 points, and hit an intraday high of 93.50 points. The index lost 0.3% yesterday, and posted its second straight daily loss, due to profit-taking from a 2-week high of 93.91 points. Alongside profit-taking the greenback was weighed down after data showed better-than-expected data in China, in addition to positive remarks about the Covid-19 aid program in the US. The US House of Representatives spokesman Drew Hamill said on Monday that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued to narrow their differences on the aid package in a telephone conversation. Hamill added that by the end of Tuesday there will be clarity on whether the aid bill can be passed before the November 3 presidential election.