The US Dollar Gains, Deadlock on Stimulus Package Supports

The US Dollar Gains, Deadlock on Stimulus Package Supports

The US dollar edged higher in early morning trade after US Treasury Secretary announced that the next stimulus bill might not be passed until after the November 3 elections.

The news from the political figure unsettled investors, sending them on a greenback buying purge, away from other safe-haven assets.

He added that he and House Speaker Nancy Pelosi are still far from reaching a compromise on their spending priorities.

The agreement’s delay sent the dollar to surge in the past weeks after successive setbacks as the US records slow economic hedge amid the health crisis. 

The US dollar index settled at 93.438 in the latest figures, but a bullish rally may be far from sight. 

According to market enthusiasts, the stimulus bill will be passed one way or another, capping USD gain prospects propelled from stimulus cash-natured supporters.

The world’s reserve currency gained against most participants of the basket of currencies, except against the pound sterling.

The UK currency gained ground on forex exchange charts following the significant developments in the Brexit talks.

It hiked by 0.5% as the European Union and the UK are set to extend the Brexit trade deal’s arduous separation deadline initially targeted mid-October.

The move will help the two counties bridge gaps and formulate a new trade agreement, as stated by sources familiar with the matter.

The European Union leaders will meet for the Brussels summit today, believed to collectively pressure the United Kingdom through the trillion-euros worth of trade with members if the country will not soften on its fishing grounds and follow the fair competition.

Asia Pacific Forex Mixed

In July, the UK let out a sharp comment, saying that it has full sovereignty over the contested fishing waters. It claims that it has the sole jurisdiction to grant access to other fishers from other European Union countries.

Should the two entities fail, millions of euros will be exhausted on transactions and tariffs as trade will be subjected to WTO regulations.

Elsewhere in the Asia Pacific, USD/JPY records another hike for the week after a 0.1% increase at 105.28.

However, the AUD/USD pair dropped to a one-week low of 0.7110 after the country’s central bank chief hinted at the possibility of a rate cut or bond buying.

On the other hand, China is focusing on the trial of the digital yuan by giving $30 worth of spending for 50,000 people.

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