U.S. stimulus hopes push dollar to one-month low; risk currencies gain
October 21, 2020 @ 11:19 +03:00
The dollar fell to a one-month low on Wednesday after U.S. President Donald Trump boosted hopes for a large fiscal stimulus package, prompting a wave of market optimism that saw traders ramp up their bets on riskier currencies. Lawmakers in Washington have been negotiating intermittently since August, with Democrats arguing for a bigger package to help manage the economic fallout from coronavirus.
Trump raised hopes for a breakthrough on Tuesday by saying he was willing to accept a large aid bill, despite opposition from his own Republican party. The comments sparked some risk-on moves in currency markets.
At 0710 GMT, the dollar was down 0.3% against a basket of currencies, at 92.801. The riskier New Zealand and Australian dollars both advanced, with the Kiwi up 0.6% and the Aussie up 0.5%.
The Norwegian crown reached a one-week high of 9.196 versus the U.S. dollar, and the Canadian dollar rose to its strongest in more than six weeks, touching 1.3081 per dollar. The euro rose to a one-month high versus the dollar in early trading and was up 0.3% at $1.18555 at 0723 GMT.
China’s yuan surged, in both offshore and onshore trading, led by firmer central bank guidance and recent data suggesting a more sustained recovery in the world’s second-largest economy. The offshore yuan reached its strongest in two years versus the U.S. dollar towards the end of the Asian session at 6.6278 before easing somewhat. By 0725 GMT, it was up 0.4% at 6.6374.
U.S. stimulus hopes push dollar to one-month low; risk currencies gain, Reuters, Oct 21