Markets call for it but US lawmakers have not yet reached an agreement about the fiscal package to cushion the economic blow from the pandemic.
Leaders in the United States and EU pushed for massive stimulus to shift market perception over the global economic recovery path.
President Donald Trump accused congressional Democrats on Wednesday of not wanting to negotiate over a U.S. coronavirus aid package. Top Republican and Democratic negotiators traded blame for a five-day lapse in talks over relief legislation. Analysts argue that U.S. lawmakers will eventually agree to more stimulus because without it the U.S. economic recovery could stall.
Stalemate in U.S. stimulus talks, trade war angst in both Europe and China and the COVID-19 pandemic all reined the bulls back.
The U.S. Presidential election may probably add another layer of uncertainty into markets, with roughly 12 weeks remaining until Election Day.
Markets are also keeping watch on frayed U.S.-China ties ahead of trade talks on Aug. 15. U.S. and Chinese officials will hold talks to review the first six months of the Phase 1 trade deal. Markets seem confident trade ties will be insulated from the diplomatic noise.
START TRADINGForex – Markets call for U.S. Stimulus package
Market sentiment has swung between optimism and pessimism. Investors closely watched for the U.S. initial jobless claims falling below one million for the first time since the start of the COVID-19 pandemic.
The U.S. dollar traded 0.3% lower at 93.093.
Dashing hopes of a compromise between the White House and Democrats over an additional fiscal programme pushed the dollar index down 0.3%.
The greenback pulled back from a three-week high to trade at 106.78 yen. Japan’s exports dived for the fourth month in a row in June, increasing concerns about a longer and more dire global downturn. The Japanese currency recouped some of its losses from the previous day, trading 0.3% higher at 106.62 per dollar.
The dollar edged lower against the safe harbour Swiss franc to 0.9118.
The Australian dollar rose, trading at $0.7161. Jobs figures showing that the economy created three times as many jobs as expected in July supported Aussie.
The New Zealand dollar fell slightly to $0.6566. The country’s central bank announced that will consider more monetary stimulus in case of a resurgence in local coronavirus infections.
Against the euro, the dollar fell 0.5% to $1.1840, adding to a 0.4% decline on Wednesday.
The British pound rose 0.5% to $1.3099. Sterling rose against the dollar on Thursday, driven by dollar weakness as traders shrugged off Wednesday’s dismal economic data. Versus the euro, the sterling was mostly flat, at 90.455 pence per euro.
Dollar weakness boosts cable. However, investors are generally bearish on the pound for the rest of the year – expecting it to rebound in 2021.
Worries about the pandemic’s economic and human toll pushed gold prices higher.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money