By Gina Lee
Investing.com – The dollar was down on Wednesday morning, with investors retreating from the safe haven asset as the U.S. is struggling to reach a consensus on further stimulus measures. Tuesday saw the U.S. Congress continuing discussions to extend unemployment benefits, due to expire at the end of July, and provide more funding to schools.
Disagreements over how much to spend on these measures to combat the economic impact of COVID-19 is widening the gap between Republicans and Democrats. A $3 trillion relief bill passed two months ago by the Democrat-majority House of Representatives has largely been ignored by the Republican-majority Senate.
But House Speaker Nancy Pelosi warned that the $1 trillion package proposed by Republicans is not sufficient.
Meanwhile, across the Pond, Europe’s leaders reached agreement on a EUR750 billion ($860.637) stimulus package at the EU Summit after over four days of negotiations. Thee 27-member bloc also passed a EUR1 trillion budget to be used between 2021 and 2027 to counter a recession not seen on the continent since World War Two.
Some Investors were not optimistic about the U.S. coming to a consensus on the measures.
"You could say the dollar is weaker due to a risk-on move," Shane Oliver, head of investment strategy and chief economist at AMP (OTC:AMLTF) Capital Investors, told Reuters.
"Ironically, the dollar's weakness has been exacerbated by concerns that the United States is not doing as much as the Europeans have on stimulus."
The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.03% to 95.090 by 9:41 AM ET (2:41 AM GMT).
The USD/JPY pair was up 0.05% to 106.81.
The AUD/USD pair gained 0.03% to 0.7129 and the NZD/USD fell 0.06% to 0.6640, reversing earlier gains.
The USD/CNY pair fell 0.07% to 6.9750 and the GBP/USD pair was down 0,01% to 1.2727.