There is concern that Democrats and Republicans are struggling to reach consensus on the next round of United States economic stimulus measures. This thus undermined the dollar. The dollar then felt losses against most currencies.
European leaders agreed on a stimulus plan to fuel recovery from the economic drag caused by the COVID-19 pandemic. Thus, on Wednesday, the euro traded near its most energetic level in more than a year.
This week, risk appetite has improved dramatically. Moreover, progress in developing vaccines for the novel coronavirus reduced the United States dollar’ safe-haven appeal.
Also, investors expect a massive amount of fiscal spending to support growth in major economies. Nevertheless, it could quickly be let down if any stimulus falls short of expectations.
Shane Oliver is chief of works at AMP Capital Investors in Sydney. He is head of investment strategy and chief economist there. He said, “there you could say the United States dollar is weaker because of a risk-on move.”
Dollar and Other Currencies
The US is not doing as much as the Europeans with their stimulus. Thus, those concerns exacerbated the dollar’s weakness.
The dollar traded at $1.2734, close to a six-week low against the British pound.
The United States dollar fell to 0.9322 Swiss francs to reach its lowest since March.
On Wednesday, in Asia, the euro rose to $1.1543. Thus, it reached its highest point since January 10.
The euro was little changed at 90.55 pence against the pound.
The United States dollar was steady at 106.82 yen.
On Tuesday, Democrats and Republicans remained far from agreement on how much to spend on the next round of coronavirus relief. They discussed proposals for extending unemployment insurance for Americans out of work and provide more money for schools.
Nancy Pelosi is House Speaker. She said that the $1 trillion packages that Republicans are considering are not sufficient.
This is the current news of the market.