Greenback Down after Mnuchin’s Cease on US Stimulus By Investing.com
From Gina Lee
Investing.com – 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.
Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges, but by market makers. As a result, prices may not be accurate and may differ from the actual market price. This means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading loss you may incur as a result of using this information.
Fusion Media or anyone involved with Fusion Media assumes no liability for any loss or damage caused by reliance on the information contained on this website, such as data, offers, charts and buy / sell signals. Please be fully informed about the risks and costs associated with trading in the financial markets. This is one of the riskiest forms of investment possible.