By Gina Lee
Investing.com – The dollar was down on Friday morning in Asia, drifting towards a second consecutive weekly loss over higher commodity prices and rekindled expectations that the U.S. Congress will pass the latest stimulus measures.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.13% to 93.502 by 9:57 PM ET (1:57 AM GMT).
House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed talks to discuss the measures, defying President Donald Trump’s ban announced earlier in the week.
Investor anticipation of further stimulus measures to support the U.S. economic recovery from the impact of COVID-19 set the greenback into retreat mode as improved risk sentiment sees investors buying riskier assets, such as commodity currencies.
With Trump continuing to receive treatment for COVID-19 and refusing to take part in the next presidential debate scheduled for the following week, Democrat candidate Joe Biden is ahead of Trump in polls and looks increasing likely to win the Nov. 3 election.
Some investors expect that a Biden win would increase the likelihood of further stimulus measures as the Democrats push for large spending packages.
“Market participants are travelling with the idea that a new round of U.S. fiscal stimulus is coming regardless, the uncertainty is more around whether it will happen before the election and how big it will be,” National Australia Bank (OTC:NABZY) senior FX strategist Rodrigo Catril told Reuters.
“Investor confidence is growing that Biden will win the Presidential election by a clear margin, reducing the risk that Trump disputes the result,” he added.
The USD/JPY pair edged down 0.15% to 105.86.
The AUD/USD pair edged up 0.19% to 0.7179. The AUD was flat for the week, despite expectations of more monetary easing from the Reserve Bank of Australia in the wake of its policy statement handed down on Tuesday.
The NZD/USD pair gained 0.46% to 0.6603, recouping almost all of Thursday’s losses after the Reserve Bank of New Zealand sent out a further dovish sign.
The USD/CNY pair was down 0.99% to 6.7223. Chinese markets re-opened after a holiday, with data released earlier in the day showing that September’s Caixin Services Purchasing Managers Index (PMI) increased to 54.8 from August’s reading of 54.
The GBP/USD pair edged up 0.16% to 1.2954, holding firm throughout the week as investors continue to monitor the progress towards a Brexit divorce deal between the U.K. and the European Union.