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

Dollar Drifts Lower; Stimulus Optimism Grows

ForexDec 04, 2020 03:03AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar slipped lower in early European trade Friday, on course for a loss of nearly 2% for the week, as increased optimism that U.S. lawmakers will come together to agree a new coronavirus relief package boosts risk sentiment.

At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 90.638, just above the two-and-a-half year low of 90.504 seen on Thursday. 

EUR/USD climbed 0.1% to 1.2155, at its highest level since 2018, having climbed over 8% this year, the single currency’s biggest gain since 2007.

USD/JPY rose 0.1% to 103.92, while the risk-sensitive AUD/USD edged 0.1% lower to 0.7431, not far off its highest level in more than two years.

The Covid-19 surge continues to hit the U.S. hard, with this week seeing 14 million recorded, including the highest number of daily deaths, new infections and hospitalizations since the pandemic began.

However, the safe haven dollar hasn’t seen any benefit from these worries amid optimism over the successful roll-out of vaccines and new fiscal stimulus to boost the U.S. economy.

A $908 billion Covid-19 aid package was gaining traction in Congress, with senior Democrat officials backing the proposal and Republican hardliner Mitch McConnell stating that a deal was “within reach” as he proposed a smaller package.

The monthly official employment report, due for release later Friday, may be the catalyst to push the two sides together. Nonfarm payrolls are expected to rise by 469,000 jobs in November, a sharp slowdown from 638,000 jobs added in October. This follows on from a disappointing ADP jobs release, which showed private payrolls grew at their slowest pace since July. 

Elsewhere, GBP/USD dropped 0.1% to 1.3443, having climbed as high as $1.35 on Thursday on a report the U.K. and EU have made progress on fishing quotas, raising hopes that a post-Brexit deal is within sight.

However, some of this optimism has retreated after U.K. Business Secretary Alok Sharma said Friday that these trade talks are in a “difficult phase”,  and after France threatened to veto any deal it didn’t approve of, suggesting there was still plenty of negotiation to take place.

“Markets are still assessing how much this is simply part of the negotiating strategy,” said analysts at ING, in a research note, “but with any deal having to be agreed within the next few days it is no surprise investors (who have retained an optimistic tone on Brexit so far) are getting increasingly nervous.”

The new deal on OPEC+ output policy supported oil currencies, with Russia's ruble gaining 0.3% to hit a three-month high against the dollar of 74.175.


Dollar Drifts Lower; Stimulus Optimism Grows

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.
Comments (2)
David Heiser
David Heiser Dec 04, 2020 6:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dollar wont see boost from stimuls. Stimulus weakens the dollar. Dollars put into economy bt Fed are a debt note that we currently cant repay.
wojtek wolinski
wojtek wolinski Dec 04, 2020 6:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They writing is atrocious. Full of typos and grammatical errors.
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