The dollar was up on Thursday morning in Asia’s forex. The U.S. and the U.K. scramble to keep up with the deadlines for the stimulus and Brexit talks, respectively.
By 9:44 PM ET (1:44 AM GMT), the U.S. Dollar Index inched up 0.05% to 91.075. It was just above the two-and-a-half-year low of 90.471 seen on Friday.
Investors turned to the safe-haven dollar. They are doubting whether the Republicans and Democrats can reach a consensus over the latest stimulus measures. Their deadline is on Dec. 11 in order to prevent a government shutdown.
It remains to be seen, however, whether the two parties can agree on one of the proposals. Moreover, counter-proposals are currently flying around Congress.
Later in the day, the Federal Reserve will meet for its last policy meeting of 2020.
The GBP/USD pair fell 0.24% to 1.3364, remaining above the week’s low of $1.3225 seen on Monday. It fell around 0.5% on Thursday.
This came after U.K. Prime Minister Boris Johnson discussed with European Commission President Ursula von der Leyen. They’ve agreed to delay a “firm decision” regarding the longer term of Brexit talks during their meeting.
Von der Leyen has warned that the European Commission and the U.K. remain separated on the trade deal.
Bank of England Governor Andrew Bailey issued a warning about a no-deal Brexit. He said it would cause longer-term damage to the U.K.’s economy than even the COVID-19 pandemic. That is with the impact of the change potentially felt for decades.
Investors who hoped that the dinner would bring some resolution before the end-of-year deadline were disappointed.
The European Council will meet from Dec. 10 to 11 in Brussels. The European Central Bank (ECB) will also convene for its last policy meeting of 2020 later in the day. On this one, it is widely expected to expand stimulus measures to support the COVID-19-stricken EU economy.
ECB President Christine Lagarde has made clear in recent weeks about an expanded Pandemic Emergency Purchase Program. This and more subsidized long-term loans for banks will form the basis of the ECB’s policy measures.
On a fourth consecutive day of losses, the euro fell to $1.2082. It was slightly below the two-and-a-half-year high of $1.2177 seen on Friday. Moreover, Lagarde’s comments have also reduced investor appetite for the euro.
The USD/JPY pair climbed 0.05% to 104.27.
The USD/CNY pair rose 0.11% to 6.5483. The offshore Chinese yuan was also drifting just below a two-and-a-half-year high seen on Wednesday.