Dollar Gains Approaching Pelosi Stimulus Deadline

Dollar money close up

The dollar was up on Tuesday morning in Asia’s forex exchange. Doubts over the status of the latest U.S. stimulus measures continue. 

Against the dollar, the Chinese yuan continued near a two-year high. Signs of economic recovery continue in China.

By 10:09 PM ET (2:09 AM GMT), the U.S. Dollar Index inched up 0.05% to 93.477.

Shares in the U.S. took a hit on Monday. This was over doubts that Congress will pass the stimulus measures ahead of the election. The US presidential election will be on November 3, now only two weeks away.

In a telephone conversation on Monday, House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin continued to narrow their differences.

Pelosi is hoping that there will be “clarity” on whether measures will be passed by deadline on Tuesday. This is in order to reach a deal with Republicans.

Investors, however, remain doubtful that a deal will be reached before Pelosi’s self-imposed deadline.

Barclays senior strategist Shinichiro Kadota said it doesn’t seem she has a clear conviction that there will be an agreement. This is although Pelosi has set a Tuesday deadline for a deal.

Forex Movement

In FX news, the USD/JPY pair wedged up 0.15% to 105.57. 

Reversing earlier losses, the USD/CNY pair edged up 0.11% to 6.687. Investors are still absorbing the Chinese quarterly growth data released on Monday.

It showed that the GDP grew 4.9% year-on-year in the Q3, less than expected. However, the data showed a continuous recovery for the world’s second-largest economy overall. 

This recovery is helping offshore yuan reach its strongest level since July 2018 and surpass its 2019 peak.

The AUD/USD pair fell 0.35% to 0.7043 with the AUD continuing a third consecutive day of losses.  

RBA Assistant Governor Chris Kent said that the RBA board is considering further monetary policy easing. This includes expanding its bond-buying program to include longer-dated government debt. 

Kent’s statement was confirmed by the minutes from the RBA’s October meeting. It revealed that the RBA discussed the possibility of further monetary policy easing. 

This includes cutting the cash rate towards zero and buying longer-dated government bonds, during the meeting. The minutes said these options would have the effect of further easing financial conditions in the country.

The NZD/USD pair was down 0.42% to 0.6576, across the Tasman Sea.

Between the U.K. and the EU as Brexit negotiations struggle, the GBP/USD pair fell 0.05% to 1.2940.

U.K. chief Brexit negotiator David Frost warned there was no basis to resume talks with the European Union. Unless there is a fundamental change in the body’s approach to negotiations, he said. 

Some investors held onto hopes that the two sides could save the post-Brexit trade talks. This is to prevent a no-deal ending to Brexit, with the drama dragging on into the fifth year.

  • Support
  • Platform
  • Spreads
  • Trading Instument

For more news updates, visit our homepage now and see our latest news article. Want to learn more about trading? Visit our education page now and learn for FREE!


Leave a Reply