Dollar Retreats After Early Strength
The U.S. dollar turned weak and shed ground against some of its peers on Monday after staying positive early on in the day.
The early strength was due to uncertainty about U.S. fiscal stimulus talks after Democrats rejected Republicans’ $1.8 trillion coronavirus relief bill proposal, saying it was “grossly inadequate.”
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.
“The news is filled with the numbers in terms of dollars. The heart of the matter is: can we allow the virus to rage on and ignore science as the Administration proposes, or will they accept the scientific strategic plan in the Heroes Act to crush the virus,” Pelosi said in a letter to her Democratic colleagues.
“We have other differences in terms of who benefits from the spending,” she added. “But in terms of addressing testing, tracing and treatment, what the Trump Administration has offered is wholly insufficient.”
Meanwhile, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows sent a letter to members of the House and Senate accusing Democrats of refusing to compromise on bipartisan legislation.
“It is not just about the top-line number but also about legislation that can be passed by both the House and the Senate and signed into law by President Trump to help the American people,” Mnuchin and Meadows wrote.
Mnuchin and Meadows urged Congress to vote on a bill allowing the administration to spend unused Paycheck Protection Program funds while negotiations on a comprehensive package continue.
The dollar index, which advanced to 93.24 earlier in the day, fell to 93.01 subsequently and was last seen at 93.04.
Against the Euro, the dollar firmed up to $1.1787 in the European session, but later dropped to $1.1814. However, it was still up in positive zone, gaining about 0.15%.
The Pound Sterling was stronger, fetching $1.3078, about 0.15% more than Friday’s close of $1.3047.
The Yen firmed up to 105.33 a dollar, rising from 105.62 a dollar Friday evening. The Cabinet Office said that the value of core machine orders in Japan rose a seasonally adjusted 0.2% in August, coming in at 752.5 billion yen. That beat forecasts for a decline of 1% following the 6.3% spike in July.
The Aussie eased to US$0.7212, falling from US$0.7240 a unit.
The Swiss franc was stronger at CHF0.9092 a dollar, compared to CHF0.9107 on Friday. A report from the State Secretariat for Economic Affairs (SECO) said that the economic slump due to the impact of the coronavirus pandemic in Switzerland this year is set to be less serious than feared earlier.
The report said the Swiss economy will shrink only 3.8% in 2020 compared to the previous projection of -6.2%.
The Loonie was up marginally, quoting at 1.3310 a dollar, recovering from a low of 1.3143.