Euro extends gains to four-week high on US stimulus hopes
Euro climbed on Wednesday against the dollar for the fourth straight day to four-week highs on higher risk appetite and hopes for US stimulus.
EUR/USD rose 0.4% to 1.1870, the highest since September 21, with an intraday low at 1.1818.
The common currency rose 0.5% yesterday, the third profit in a row following positive developments in US stimulus talks.
US President Donald Trump announced he'd accept a stimulus package of $2.2 trillion, and even more than Democrats wanted, which might be considered a breakthrough in stimulus talks.
Trump said he's confident he can get the votes, both Democratic and Republican, to pass the massive Covid relief package.
The dollar index fell 0.4% on Wednesday, marking the fourth loss in a row and hitting seven-week lows at 92.68.
The US dollar rose against a basket of currencies on Monday, to extend gains for the second straight day, due to renewed fears of a liquidity crunch, amid a sharp sell-off in most global stock markets, and ahead of an important speech by Fed Chair Jerome Powell. The dollar index rose by 0.45% to 93.37 points, after it opened at 93.01, and hit an intraday low of 92.75. The greenback gained more than 0.1% on Friday, and posted its third daily gain, buoyed by upbeat economic data for September. During the past week, the dollar index lost 0.3%, its first weekly loss in 3 weeks, after the Federal Reserve renewed its pledge to hold interest rates until 2023. The greenback shined as the best alternative investment due to growing concerns over that the global economy, after a surge in coronavirus infections in Europe and the US. Federal Reserve Chair Jerome Powell is due speak at 14:00 GMT, about rule-making for the community reinvestment act, which is expected to deliver some insight about the future of US monetary policy.
At 12:30 GMT, the Canadian economy released its monthly reading of the consumer price index, which fell by 0.1% in September, on par with forecasts and August's reading. The CPI y/y reading rose 0.4% vs. 0.1% in the previous reading, beating forecasts of 0.3%.
Euro fell in European trade against dollar away from two-week highs his on Friday on active profit taking while investors shun risks on doubts over US stimulus. EUR/USD fell 0.2% to 1.1805, after closing up 0.6% on Friday, marking two-week highs at 1.1831. Euro rose nearly 1% last week against dollar on higher risk appetite in the markets back then. The dollar index rose 0.1% on Monday on track for the first profit in four days away from three-week lows at 93.01. Dollar's rebound came as haven demand climbed on the greenback amid doubts over US ability to deliver new stimulus. US President Donald Trump presented a financial rescue package worth $1.8 trillion to House Democrats who are still clinging to a $2.2 trillion package. Trump's proposal aroused opposition from his own Republicans who voiced concerns over the pressure on deficit. Investors are now betting Democratic nominee Joe Biden will win the next presidential elections, viewing it as a positive developments to reduce tensions with China.