Risk appetite improved on optimism that lawmakers in Washington will reach a deal for new stimulus. It is to blunt the economic impact of the coronavirus. Thus, on Monday, riskier currencies outperformed, and the United States dollar dipped.
There are stimulus hopes. Moreover, doctors said that the United States President Donald Trump could be discharged from the hospital where he is being treated for coronavirus. Thus, on Monday, stocks opened higher.
Erik Nelson works for Wells Fargo in New York. He is a macro strategist there. So, Nelson said that there is some more optimism around fiscal stimulus coming down the spike. On Sunday, United States House Speaker Nancy Pelosi said that progress is going about coronavirus relief legislation.
Nevertheless, failure to reach a deal will most probably be positive for the United States dollar. On Monday, against a basket of major currencies, the United States dollar fell 0.41%.
Dollar and Others
Nelson said that they think that the prospects for stimulus before the election are still meager. Moreover, Nelson added that they believe that they should fade this dollar weakness they see today. That weakness must disappear against some of those higher currencies like the Australian dollar and the Norwegian krone.
The euro gained 0.57% to $1.1783. It is the highest indicator since Sept. 21. The greenback dipped 0.76% to 9.2296 krone, and the Australian dollar increased by 0.35% to $0.7187. COVID-19 diagnosis of Trump adds an extra layer of uncertainty concerning the United States Nov. 3 presidential election will payout.
There is no clear consensus about how the United States dollar will trade on this degree of political uncertainty in the United States. That is what Jane Foley said. She is a senior FX strategist at Rabobank.
As soon as Monday, Trump might be out of the hospital where he is treating COVID-19.
That is the current news of the market.