NEW YORK (Reuters) - The safe-haven dollar sank to a fresh two-and-a-half-year low on Wednesday, pressured once again by expectations of further fiscal stimulus for the United States.
A proposed bipartisan coronavirus pandemic-related economic stimulus package on Tuesday worth $908 billion as well as COVID-19 aid talks between U.S. Treasury Secretary Steve Mnuchin and House of Representatives Speaker Nancy Pelosi lifted the market’s appetite for risk and pushed the dollar to its lowest level since April 2018. That trend continued on Wednesday.
Mnuchin said President Donald Trump would sign a pandemic relief deal proposed by Senate Majority Leader Mitch McConnell.
For months, McConnell has been pushing for a $500 billion approach that Democrats rejected as insufficient. The plan includes $332.7 billion in new loans or grants to small businesses, according to a document provided to Reuters.
The momentum for a weaker dollar should continue, said Vassili Serebriakov, an FX strategist at UBS in New York. “Any bounces in the dollar are likely to find sellers.”
In mid-morning trading, the dollar index, which measures the greenback against a basket of major currencies, was flat to slightly lower to 91.160, after hitting 91.100, the lowest level since late April 2018 hit overnight.
Data showing slower U.S. private hiring last month also supported some safe-haven buying of the dollar.
Private payrolls increased by 307,000 jobs in November, the ADP National Employment Report showed on Wednesday, lower than economists’ forecasts of a 410,000 rise in new jobs. Data for October, though, was revised up to show 404,000 jobs added instead of the initially reported 365,000.
Britain’s approval of a COVID-19 vaccine and the possibility that U.S. unemployment data will help spur a pandemic relief package in Washington are likely to support investors’ risk tolerance, driving them away from the dollar, Serebriakov said.
Britain approved Pfizer’s COVID-19 vaccine on Wednesday, jumping ahead of the rest of the world in the race to begin the most crucial mass inoculation program in history.
The euro, meanwhile, was up 0.2% at $1.2095, after earlier hitting $1.2108, the highest since April 2018. The European Central Bank meets next week, and analysts said the euro could be pressured as investors worry the ECB will act to curb its rapid rise.
Against the yen, the dollar rose 0.2% to 104.47.
The Bank of Japan’s deputy governor signaled that the central bank was ready to extend pandemic-response programs, saying it would “take additional easing steps without hesitation as needed.”
Bitcoin was up 0.6% at $18,850, after hitting a record high of $19,918.01 on Tuesday.
The British pound fell after news headlines saying Britain’s post-Brexit trade deal with the European Union “still hangs in balance.”
The pound last traded down 0.7% against the dollar at $1.3324.
The risk-sensitive Aussie dollar turned slightly higher to US$0.7375. It bounced in Asia as data showed Australia’s economy rebounded more than expected in the third quarter.
Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Ritvik Carvalho in London; Editing by Will Dunham
"low" - Google News
December 02, 2020 at 09:15AM
https://ift.tt/3mwQsf1
Dollar drops to fresh two-and-a-half-year low on continued stimulus optimism - Reuters
"low" - Google News
https://ift.tt/2z1WHDx
Bagikan Berita Ini
0 Response to "Dollar drops to fresh two-and-a-half-year low on continued stimulus optimism - Reuters"
Post a Comment