Greenback Down after Mnuchin’s Cease on US Stimulus By

© Reuters.

From Gina Lee – The dollar fell in Asia on Friday morning, and investors digested US Treasury Secretary Steven Mnuchin’s request on Thursday to return funds to corporations, nonprofits and local governments on COVID-19 loans. However, the markets continued to avoid large moves overall.

The greenback versus a basket of other currencies fell 0.01% to 92.295 at 10:34 p.m. (1:34 p.m. GMT). The dollar lost ground against riskier currencies for over a week as uncertainty over the US presidential election subsided and vaccine developers continued to report progress in developing a COVID-19 vaccine.

Mnuchin’s move aims to recycle around $ 455 billion that was allocated to the Treasury Department under the CARES Act earlier this year, and sparked concern among some investors that programs could play an important role alleged to have played the cushioning of the COVID-19 blow.

“Investors have relied on the Municipal Liquidity Facility (MLF) to be a trusted emergency lender to the major borrowers in the municipal bond market. The idea of ​​a default or a catastrophic budget problem was taken off the table, ”Matt Fabian, partner of Municipal Market Analytics, told Reuters.

“Without the MLF, the market won’t collapse, but it would lack resilience if tested by a sell-off or heightened credit fears,” he added.

The move also stopped the dollar’s decline after the U.S. Senate Republicans reportedly agreed to resume negotiations with the Democrats on the latest COVID-19 stimulus package.

The pair rose 0.12% to 103.84. “The dollar / yen appears to have reestablished a strong correlation with US bond yields in the past two weeks. This points to the risk of a further downtrend in the currency pair if US bond yields continue to fall, ”Tohru Sasaki, head of Japanese market research at JP Morgan, told Reuters.

The pair was up 0.07% to 0.6917. Across the Tasman Sea, the pair fell 0.02% to 0.7286. The reverberation of tensions between Australia and China continues a day after China submitted a 14 disputes dossier to Australia, issued by the Chinese Embassy in Australia and read by Prime Minister Scott Morrison.

The pair fell 0.04% to 6.5760. The yuan fell after hitting two and a half year highs against the dollar on Wednesday.

The pair was down 0.02% to 1.3259. The pound fell after reports that European leaders will urge the European Commission not to release Brexit plans as the deadline for reaching a year-end deal is fast approaching.

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