U.S. Dollar Strengthens On Stimulus Deadlock
The U.S. dollar firmed against its most major counterparts in the European session on Monday, as U.S. stimulus talks remained deadlocked after Democrats’ had rejected Republicans’ $1.8 trillion coronavirus relief bill proposal.
While Republicans blamed it for being too large, Democrats said that the funding was not sufficient.
House Speaker Nancy Pelosi said that the proposal lacked a strategic plan to contain the spread of the outbreak, and has inadequate aid for state and local governments as well as financial relief for American families.
It is unclear whether Congress will have time to introduce a pandemic relief bill and pass it through the Republican-held Senate before the election.
This week’s economic docket features consumer inflation on Tuesday, followed by producer prices on Wednesday. The attention will then shift to weekly jobless claims on Thursday and retail Sales and the consumer sentiment index on Friday.
The dollar edged up to 0.9124 against the franc and held steady thereafter. The pair had ended Friday’s trading at 0.9092.
The greenback rose to 1.1787 against the euro and 1.3005 against the pound, from its previous low of 1.1827 and near a 5-week low of 1.3060, respectively. If the greenback continues its rise, 1.16 and 1.29 are possibly seen as its next resistance levels against the euro and the pound, respectively.
Reversing from its early lows of 0.7235 against the aussie and 0.6671 against the kiwi, the greenback rebounded to 0.7205 and 0.6645, respectively. The dollar may find resistance around 0.70 against the aussie and 0.645 against the kiwi.
In contrast, the greenback fell to a weekly low of 105.36 against the yen from Friday’s closing value of 105.59. On the downside, 100 is possibly seen as its next support level.
Data from the Bank of Japan showed that Japan producer prices fell 0.2 percent on month in September – missing expectations for a flat reading following the downwardly revised 0.1 percent increase in August.
On a yearly basis, producer prices sank 0.8 percent – again shy of expectations for a loss of 0.5 percent, which would have been unchanged from the August reading.
The greenback remained weaker against the loonie and was trading at 1.3123. The greenback is seen locating support around the 1.29 level.