Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar Down in the wake of Mnuchin halt on U.S. Stimulus

ForexNov 19, 2020 08:48PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Gina Lee – The dollar was down on Friday morning in Asia, with investors digesting U.S. Treasury Secretary Steven Mnuchin request on Thursday for the Federal Reserve to return funds earmarked for COVID-19 lending to businesses, nonprofits and local governments. Markets continued to avoid big moves overall, however.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.01% to 92.295 by 9:34 PM ET (1:34 AM GMT). The dollar has lost ground against riskier currencies for over a week as the uncertainty from the U.S. presidential election dies down and vaccine developers continue to report progress towards a COVID-19 vaccine.

Mnuchin’s move seeks to re-appropriate some $455 billion allocated to Treasury under the CARES Act earlier in the year, and sparked concern from some investors that programs that are viewed to have played a vital role in cushioning the COVID-19 blow will be suspended.

“Investors have banked on the Municipal Liquidity Facility (MLF) being a reliable, emergency lender to the municipal bond market’s core borrowers. It has taken the idea of a payment default or catastrophic budget problem off the table,” Municipal Market Analytics partner Matt Fabian told Reuters.

“Without the MLF, the market won’t collapse, but it would lack some resilience if it is tested by a selloff or more pronounced credit fears,” he added.

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

The USD/JPY pair edged up 0.12% to 103.84. “The dollar/yen appears to have recovered strong correlation with U.S. bond yields over the past two weeks. This points to risk of further downside in the currency pair, should U.S. bond yields fall further,” J.P. Morgan head of Japan market research Tohru Sasaki told Reuters.

The NZD/USD pair inched up 0.07% to 0.6917. Across the Tasman Sea, the AUD/USD pair inched down 0.02% to 0.7286. Reverberations from Australia-China tensions continue a day after China presented Australia with a dossier of 14 disputes issued by the Chinese embassy in Australia, which Prime Minister Scott Morrison has read.

The USD/CNY pair inched down 0.04% to 6.5760. The yuan eased after hitting a two and half year high against the dollar on Wednesday.

The GBP/USD pair inched down 0.02% to 1.3259. The pound was down after reports that European leaders will urge the European Commission to publish no-deal Brexit plans as the deadline to reach a deal, set for the end of the year, rapidly approaches.

Dollar Down in the wake of Mnuchin halt on U.S. Stimulus

Related Articles

Taliban expand economic team as Afghan crisis deepens
Taliban expand economic team as Afghan crisis deepens By Reuters - Sep 21, 2021

(Reuters) - Afghanistan's Taliban government bolstered its economic team on Tuesday, naming a commerce minister and two deputies as the group tries to revive a financial system in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email