The United States dollar index rose by 0.1%.
United States fiscal stimulus boosts the dollar.
United States-China tensions keep currency markets subdued.
Investors focused on fiscal stimulus in the United States and the China-United States tensions ahead of crucial trade talks on August 15. Thus, on Monday, the dollar strengthened, including against the Swiss franc and the euro.
The dollar index recovers from a losing streak, which saw it lose 4% in July. Jobs data calmed some fears concerning the United States labor market. Nevertheless, it still weakened during the week for the seventh week in a row. Thus, on Friday, the index picked up.
Moreover, talks in Washington about the next round of fiscal stimulus broke down. Thus, on Saturday, the United States President, Donald Trump signed executive orders. The order will partially restore unemployment payments to tens of millions of jobless Americans.
The United States dollar index held steady in the Asian session. Nevertheless, in early London trading on Monday, it rose and was up 1% at 93.532 at 1008 GMT.
Dollar and Others
Thu Lan Nguyen works at Commerzbank. She is an analyst there. Nguyen wrote that a little stimulus is better than none at all.
Moreover, she added that at least that is how the market seems to see it. That is why the United States dollar trades moderately stronger.
In the last week, speculators increased their net short dollar positions. It is according to weekly futures data on Friday.
Tensions between China and the United States have continued to escalate. Furthermore, the United States imposed sanctions on top Chinese and Hong Kong officials. Thus, at the end of last week, the dollar strengthened.
On Monday, that continued to drive investors towards the safe-haven dollar. China imposed sanctions on eleven United States citizens, including legislators.
Jimmy Lai is a prominent democracy activist of Hong Kong media tycoon. On Monday, he was arrested under China’s new national security law in the territory.