Let us track changes in the market. Political wrangling concerning a stimulus package for the United States economy halted its recent rebound. Thus, on Wednesday, the dollar struggled to hold recent gains.
Investors watch for any signs that a political impasse in Washington about a further rescue package for the pandemic-hit economy can be overcome.
The dollar has held above a two-year low hit on Thursday of 92.495. against a basket of currencies, it was down nearly 0.1% at 93.643., after shedding gains made in Asian trading.
FX analysts at Commerzbank said in a note that if there is no movement in the negotiations soon, the Federal Reserve’s concerns are quite likely to have an impact on the dollar more rapidly or later.
United States inflation figures due at 1230 GMT are forecasted to show consumer price growth drift down to 1.1% on a year-on-year basis, from 1.2% in June.
Dollar and Other Currencies
Against the yen, the United States dollar continued to make gains. After slumping to 106.825 earlier, the Japanese currency was down nearly 0.3%, its lowest since July 24.
By luring investment from the zero-yielding Japan, the improved United-States debt yields have pressured the yen.
Despite data showing the United Kingdom’s economy had entered a deep recession, the sterling was flat. Signs of recovery in June provided more support for the currency.
New Zealand’s central bank held rates. Nevertheless, central banks surprised markets by extending its bond-buying program and putting a little more emphasis on the possibility of negative rates. Thus, the New Zealand dollar fell 0.6% to $0.6541.
Imre Speizer is a Westpac FX analyst. He said that this is why interest rates have fallen a few basis points, and why the kiwi fell. That is a modest dovish reaction.
That is all for the leading news of the global market and the situation of the dollar. Let us hope that the coronavirus situation gets better.