On Friday, the American Dollar rose from a nearly 2-and-a-half-year lows bottomed yesterday as a month-long US Dollar sell-off wave stemmed from advancements over a fresh $900 billion in US pandemic relief bill had calmed down following disagreement over the details of the bill, though bipartisan US lawmakers have been burnishing the final details of the stimulus deal over the weekend, however, any vote on the bill which would be involving a one-time check between $600 to $700 and an extended unemployment benefit for the Americans laid off in the paddock of the pandemic resurgence, would be increasingly unlikely before Sunday evening, said the Republican Senate Majority leader Mitch McConnel.
On top of that, as the greenback has been paring some of its week’s losses that snapped a four-day long losing streak for American currency on Friday, growing possibilities of a tumultuous exit of Britain from EU without a decipherable trade deal for its $1-trillion worth of businesses with the 26-member bloc, had depreciated investors’ sentiments further.
US Dollar pulls back from a two-year low as Brexit, stimulus uncertainty return
Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against a basket of six major currencies in an average, gained 0.21 per cent to 90.01 after drooling to as much as 89.82 on Thursday, snapping a straight four-day long losing run, however, on the week, the American Dollar Index faltered 1.16 per cent, marking up the Index’s worst weekly percentage decline since early-November.
Besides, as a post-Brexit trade deal seemed highly unlikely with just hours left of a deadline, the British Pound plunged as much as 0.60 per cent to $1.3505, while the bloc’s common currency euro had curbed out 0.25 per cent to round off the day at $1.2240, but gained 0.33 per cent against its British counterpart, wrapping up the day at 0.9060 pence per euro.
Meanwhile, adding that a delay in US stimulus package alongside mounting pandemic cases despite a pandemic vaccine rollout in a number of G7 economies, were fuelling up a safe-haven bid for the American currency, a senior FX analyst at Tempus Inc., Juan Perez said, “Brexit is a major risk item that is not being resolved.
That ruins the whole global stability narrative and that helps the dollar”. So far, 1.1 million people have been vaccinated against the pandemic contagion in less than a week after rollout.