The Turkish lira was near a record low. After seen weeks of decline, the dollar bounced back. Investors stick to the hope of more talks about the stimulus.
There were 7 weeks of an almost relentless fall. This is because investors clung to hopes of a bi-partisan stimulus deal in Washington, and United States bond yields rebounded from multi-month lows. Thus, on Tuesday, the dollar held overnight gains.
From Friday’s two-year low of 92.495, the dollar index jumped back to 93.597. Traders said that the currency was due for a short-term corrective bounce, having fallen for seven straight weeks.
Having eased 0.5% in the previous trade, the common currency changed hands at $1.1741. The United States remained almost flat at 105.96 yen.
Minori Uchida works at MUFG Bank. He is a chief currency analyst there. Uchida said that the decline of the dollar appears to have come to a halt for now. Moreover, he added that talks of fiscal spending are at a stalemate. Nevertheless, they are at least avoiding a complete cutoff of extra jobless benefits.
Dollar and Others
On Saturday, the United States President Donald Trump signed executive orders restoring part of unemployment payments and suspending payroll taxes.
Takafumi Yamawaki works at J.P.Morgan. He is head of Japan rates and FX research. Yamawaki said that economic boosts from the announced measures would be smaller, compared to market consensus of a stimulus deal worth $1 trillion-$1.5 trillion.
Moreover, J.P.Morgan’s Yamawaki said that investors appear to think that there will be some sort of deal eventually, looking at market reactions.
On Monday, Trump administration and United States congressional leaders said they were ready to resume negotiations on a coronavirus aid deal. Nevertheless, it was unclear if Republicans and Democrats would be able to bridge their differences.
On Monday, the yield on 10-year United States Treasuries rose to as high as 0.581%. It is the highest level in more than a week.