Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Edges Higher as Stimulus Talks Stumble; Losses Loom

ForexOct 12, 2020 02:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - The dollar edged higher in early European trade Monday, with negotiations over the latest stimulus measures in the U.S. seemingly in difficulties as the election approaches.

At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 1% at 93.108, regaining a little ground after recording its biggest loss in six weeks on Friday, falling to a near-three-week low of 92.997. 

Elsewhere, EUR/USD dropped 0.1% to 1.1814, USD/JPY was down 0.1% at 105.50, GBP/USD was flat at 1.3050, while the risk-sensitive AUD/USD fell 0.2% to 0.7227.

The dollar had been hard hit Friday on hopes that a deal for new U.S. stimulus would be reached, reducing the need for this safe haven currency, after the Trump administration proposed a new $1.8 trillion package.

However, this offer ran into opposition from both sides, with the Democrats saying it was not comprehensive enough and the hard-line Republicans worried about the extent that this would increase the country’s debt pile.

That said, this rebound in the dollar, limited as it is, may be short-lived if Goldman Sachs (NYSE:GS) is to be believed. The influential investment bank suggested the greenback could well slump to its lows of 2018--when the dollar index fell below 89--on the rising likelihood of Joe Biden winning the U.S. election and progress on a coronavirus vaccine.

“The risks are skewed toward dollar weakness, and we see relatively low odds of the most dollar-positive outcome -- a win by Mr. Trump combined with a meaningful vaccine delay,” Goldman strategists wrote in a note Friday. “A ‘blue wave’ U.S. election and favorable news on the vaccine timeline could return the trade-weighted dollar and DXY index to their 2018 lows.”

Elsewhere, the Chinese yuan weakened Monday after the People's Bank of China said it will lower the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading, a move which is seen keeping the yuan's strength in check. 

The yuan hit a 17-month high on Friday, having gained more than 6% against the dollar since late May. At 2:55 AM ET, USD/CNY traded 0.3% higher at 6.7160.

Additionally, USD/TRY climbed 0.5% to 7.8977, with the lira weakening despite the Turkish central bank raising the remuneration rate applied to lira required reserves to 7% from 5%.

Turkey’s central bank raised interest rates in September, for the first time in two years, to provide a boost to a currency which is down 34% year-to-date. Forex traders smell weakness as Turkey has used up a lot of its foreign exchange reserves during the coronavirus pandemic, and further losses look likely.

 

Dollar Edges Higher as Stimulus Talks Stumble; Losses Loom
 

Related Articles

Ukraine tensions lift dollar, send euro lower
Ukraine tensions lift dollar, send euro lower By Reuters - Jan 24, 2022

By Herbert Lash and Sujata Rao NEW YORK/LONDON (Reuters) - The dollar rose to a two-week high on Monday against a basket of currencies, lifted by rising geopolitical risk over...

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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 (5)
Kevin McCarthy
Kevin McCarthy Oct 12, 2020 2:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it's President Trump, not Mr Trump. learn to write.
John Snoberger
John Snoberger Oct 12, 2020 6:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Weak dollar brings the price up.
John Snoberger
John Snoberger Oct 12, 2020 6:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Strong dollar brings price down.
John Snoberger
John Snoberger Oct 12, 2020 6:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Strong dollar brings price down.
John Snoberger
John Snoberger Oct 12, 2020 6:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
DXY is a key to a price in gold, silver & oil.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email