US Dollar dip-buying hits seven-week lows as pandemic relief bill in focus

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US Dollar dip-buying hits seven-week lows as pandemic relief bill in focus

On Wednesday, the US Dollar Index measured against a basket of six major currencies slid to a seven-week low after remarks from the US President Donald Trump alongside the US House Speaker Nancy Pelosi had bolstered hopes for a large-scale fiscal stimulus, prompting a number of traders to step up their bets on riskier assets while deserting the greenback.

Apart from that, a stronger appetite for the safe-haven Japanese Yen alongside the precious gold futures’ prices had also jolted the American currency below its key support level of 93.00, while the US Dollar Index (DXY) had wrapped up the day down by 0.47 per cent to 92.60, its lowest level since September 2.

Dollar index weakens as US stimulus hope ramps up bets for riskier assets

In point of fact, a sharp softening of the US Dollar Index on Wednesday’s FX market came forth as the Trump Administration and the Congressional Democrats appeared to have narrowed down their differences on a second-round of trillion-dollar stimulus package, heightening up appetite for the riskier assets, while the US President Donald Trump was quoted saying that he intended to accept an upscaled stimulus bill despite growing oppositions from his own Republican lawmakers.

Aside from that, US House Speaker Nancy Pelosi had also pushed down a Tuesday deadline for a US relief bill to Friday, leading to a mass-scale sell-off wave for the greenback. Citing statistics, in the day’s Commodity market closure, the American currency hit a four-week low against the safe-haven Japanese Yen to 104.55 per US Dollar, while China-trade sensitive Australian and New Zealand Dollar gained 1.11 per cent and 1.32 per cent respectively against their American counterpart.

Elsewhere, the British Pound torrented as much as 1.53 per cent to $1.3137 after UK’s Chief Brexit negotiator David Frost had told reporters that the latest leg of negotiations over a post-Brexit EU-UK deal would resume as early as by Thursday.

On top of that, an uneven economic recovery of US economy, which had been reflecting a steeper fluctuation en route towards warding off the withering fiscal impacts of the pandemic, had also weighed on investors’ morale, suggested analysts.