Federal Reserve: economy is recovering faster than expected
The minutes of the Federal Reserve meeting on September 15-16 showed that the majority of members saw that the US economy's recovery is faster than expected during the past few months compared to the second quarter.
The Fed members noted that corporate investments began to recover recently, and that the economic activity in general was better than expected, albeit still below pre-pandemic levels.
The Federal Reserve also stressed the need for more fiscal support to continue the rapid recovery.
Members of the bank see that the lack of more fiscal support from the US Congress means further difficulties for families, businesses and the US economy.
USD/JPY tilted lower in Asian trade off September 15 following earlier Japanese data and ahead of US data today. As of 07:11 GMT, USD/JPY fell 0.09% to 105.31, with a week high at 105.54. Earlier Japanese data showed services prices rose 0.1%, slowing down from 1.1% in July. From the US, durable goods orders are expected up 1.1%, slowing down from 11.4% in July, while core orders are expected up 1%. Federal Reserve Bank of New York President John Williams will speak about the COVID-19 job market at a webinar hosted by the University of Rochester. Chicago Fed President Charles Evans said that the US economic crisis is worse than it appears in the economic data, while other Federal Reserve's members expressed that the economy would recover from the pandemic by the end of this year. White House Chief Health Advisor Anthony Fauci expressed that an effective vaccine is being developed, adding that the US would have the vaccine by next November or December. At his Congressional testimony, Fed Chair Jerome Powell said over $195 billion of aid was given away to counter the Covid 19 impact. He called on Congress to issue further stimulus to help families and small and medium companies as recession continues to haunt the economy. US President Donald Trump has refused to commit to a peaceful transfer of power in case his opponent Joe Biden won the presidential elections in November.
The Canadian dollar rose on Tuesday, as investors focused on the latest developments about the second Covid-19 stimulus package in the US. US Treasury Secretary Steven Mnuchin will meet later today with several Congress members both Republicans and Democrats to pave the way for an agreement on the second fiscal aid package. The Trump Administration said last week that has proposed more than $1.8 trillion within the second Covid-19 package to pass it in Congress to support the US economy. This came as most of countries, led by the US, European countries, Canada and others, are facing a fierce war with the coronavirus crisis and its global economic impact. As of 18:08 GMT, CAD/USD rose 0.6% to 0.7627, after hitting an intraday high of 0.7628, and a low of 0.7573.
Euro fell in European trade for another session against dollar away from two-week highs on profit-taking and risk aversion on concerns the yuan might rise and negatively impact China's economic recovery. EUR/USD fell 0.3% to 1.1778, after closing down 0.2% yesterday, the first loss in four days away from two-week highs at 1.1831. The common currency rose 1% last week against the greenback, the second weekly profit in a row on higher risk appetite and hopes of US stimulus. Investors are shunning high-risk currencies this week as doubts returned over US stimulus and whether it can be passed before the November elections. The yuan is also rising against dollar, in turn hampering recovery with Chinese authorities attempting to weaken it to boost exports.