Dollar Drops As Trump Hints At Partial Stimulus
07 October 2020 - 04:47PM
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The U.S. dollar fell against its most major opponents in early
European trading on Wednesday, as U.S. President Donald Trump's
backing for partial stimulus lifted risk sentiment.
Trump asked Congress to approve paycheck protection and airline
support, despite the rejection of Democrats' fiscal aid
proposal.
"The House & Senate should IMMEDIATELY Approve 25 Billion
Dollars for Airline Payroll Support, & 135 Billion Dollars for
Paycheck Protection Program for Small Business. Both of these will
be fully paid for with unused funds from the Cares Act. Have this
money. I will sign now," Trump tweeted.
Investors are also pinning hopes that the Fed will consider more
accommodation to keep the economic recovery on track.
The minutes from the Fed's September meeting will be published
at 2 pm ET.
The U.S. Vice presidential debate between Mike Pence and Senator
Kamala Harris also remain in the spotlight.
The greenback dropped to 1.2930 against the pound, from a 5-day
high of 1.2865 set at 5:00 pm ET. The greenback is poised to
challenge support around the 1.31 mark.
Data from the Lloyds Bank subsidiary Halifax and IHS Markit
showed that UK house prices increased at the fastest pace in more
than four years in September.
House prices grew 7.3 percent on a yearly basis in three months
to September, following a 5.2 percent rise in three months to
August.
After climbing to a 2-day high of 1.1725 at 10:00 pm ET, the
greenback eased off to 1.1767 against the euro. Next key support
for the greenback is likely located around the 1.20 level.
Data from Destatis showed that German industrial production
declined unexpectedly in August.
Industrial production dropped 0.2 percent on a monthly basis in
August, in contrast to a 1.4 percent rise posted in July.
Economists had forecast an increase of 1.5 percent.
The greenback pulled back from a 2-day high of 0.9185 against
the franc, with the pair trading at 0.9160. The next immediate
support for the greenback is seen around the 0.90 level
The greenback retreated to 0.7146 against the aussie, 1.3287
versus the loonie and 0.6600 versus the kiwi, from an 8-day high of
0.7096, 1-week highs of 1.3341 and 0.6576, respectively seen in the
Asian session. The dollar is seen finding support around 0.74
against the aussie, 1.29 versus the loonie and 0.68 versus the
kiwi.
In contrast, the greenback rallied to 106.07 against the yen,
its highest level since September 14. The greenback is likely to
face resistance around the 108.00 region, if it gains again.
Looking ahead, Canada Ivey PMI for September and U.S. consumer
credit for August are set for release in the New York session.
The Fed minutes from the September 15-16 meeting will be
released at 2:00 pm ET.
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