Dollar edges up ahead of U.S. presidential debate; Aussie and Kiwi firm

Tuesday,   29-Sep-2020   02:14 PM (IST)

The dollar edged up on Tuesday, still close to 2-month highs, as markets awaited the first debate between the U.S. presidential candidates, signs of progress in U.S. fiscal stimulus talks and economic data, including German inflation. After racking up its biggest weekly gains since early April last week as markets turned cautious and sought safer assets, the dollar erased some losses on Monday and resumed gaining on Tuesday, ahead of the debate between President Donald Trump and Democratic challenger Joe Biden. The 90-minute televised debate at 2100 ET (0100 GMT) will be closely watched by investors for signs as to how the market reacts to perceived victories by either candidate. At 0723, the dollar was at 94.265 against a basket of currencies, up 0.1% on the day. It held steady during a quiet Asian session but picked up as European markets opened. Equity markets opened lower, but riskier currencies held firm, with the New Zealand dollar steady at 0.656 versus the dollar and the Australian dollar up 0.2% on the day at 0.70845. Markets were also waiting for developments in talks over aid for people affected by the coronavirus in the United States. U.S. House of Representatives Speaker Nancy Pelosi said on Monday that Democratic lawmakers were unveiling a new $2.2 trillion fiscal stimulus bill, which she said was a compromise and less costly as it covers a shorter period of time. European Central Bank policymakers are increasingly divided over how to steer Europe’s economy through a second wave of COVID-19 infections. German inflation data for September is due at 1200 GMT and is expected to be at -0.1%, according to a Reuters poll. ECB President Christine Lagarde said on Monday that dissent among policymakers is normal. She also said that the governing council will carefully assess developments in the exchange rate.