Dollar Down in the wake of Mnuchin halt on U.S. Stimulus
Friday,
20-Nov-2020
09:26 AM (IST)
The dollar was down on Friday morning in Asia, with investors digesting U.S. Treasury Secretary Steven Mnuchin request on Thursday for the Federal Reserve to return funds earmarked for COVID-19 lending to businesses, nonprofits and local governments. Markets continued to avoid big moves overall, however. The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.01% to 92.295 by 9:34 PM ET (1:34 AM GMT). The dollar has lost ground against riskier currencies for over a week as the uncertainty from the U.S. presidential election dies down and vaccine developers continue to report progress towards a COVID-19 vaccine. Mnuchin’s move seeks to re-appropriate some $455 billion allocated to Treasury under the CARES Act earlier in the year, and sparked concern from some investors that programs that are viewed to have played a vital role in cushioning the COVID-19 blow will be suspended. The move also stopped the dollar’s slide after U.S. Senate Republicans reportedly agreed to resume negotiations with the Democrats on the latest COVID-19 stimulus package. The USD/JPY pair edged up 0.12% to 103.84. “The dollar/yen appears to have recovered strong correlation with U.S. bond yields over the past two weeks. This points to risk of further downside in the currency pair, should U.S. bond yields fall further,” J.P. Morgan head of Japan market research Tohru Sasaki told Reuters. The NZD/USD pair inched up 0.07% to 0.6917. Across the Tasman Sea, the AUD/USD pair inched down 0.02% to 0.7286. Reverberations from Australia-China tensions continue a day after China presented Australia with a dossier of 14 disputes issued by the Chinese embassy in Australia, which Prime Minister Scott Morrison has read. The USD/CNY pair inched down 0.04% to 6.5760. The yuan eased after hitting a two and half year high against the dollar on Wednesday. The GBP/USD pair inched down 0.02% to 1.3259. The pound was down after reports that European leaders will urge the European Commission to publish no-deal Brexit plans as the deadline to reach a deal, set for the end of the year, rapidly approaches.
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