Dollar Extends Slide Against Peers As Stimulus Hopes Rise

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The U.S. dollar was down against most of its peers on Wednesday, extending recent weakness, amid continued focus on updates on stimulus talks.

U.S. House Speaker Nancy Pelosi said on Bloomberg TV that legislators are starting to commit the measure to paper, but cautioned “Legislation is tough.”

Senate Majority Leader Mitch McConnell signaled a willingness to bring a bill passed by the House, and supported by President Trump, to the floor at some point.

Trump signaled that he was willing to accept a large aid bill despite opposition from the Republicans.

As optimism about a fiscal stimulus grew, riskier currencies firmed up, pushing the dollar index to its weakest level in about seven weeks.

The dollar index fell to 92.47 around late morning, and although it recovered some lost ground as the session progressed, it was still down in negative territory with a notable loss of about 0.44% at 92.66.

Against the Euro, the dollar weakened to $1.1882 before recovering to $1.1860, still trailing its previous close by about 0.3%.

The Pound Sterling firmed up against its peers after Comments from Bank of England deputy governor that it is not the time to cut interest rates to below zero. Against the dollar, the sterling rose sharply, fetching $1.3176 a unit before paring some gains as it retreated to $1.3146.

The pound’s rise was also due to EU Chief Negotiator Michel Barnier’s optimistic comments about a post-Brexit trade deal. Barnier told the European Union parliament the EU was committed to making the necessary compromises required to agree a deal over coming weeks.

The Yen was quite stronger at 104.58 a yen, compared with 105.51 a dollar on Tuesday.

The Aussie was up nearly 1% with the AUD-USD pair at 0.7117. The Swiss franc was up at 0.9054 a dollar, compared to 0.9071 yesterday.

The Loonie was weaker at 1.3147 a dollar following a sharp drop in crude oil prices. the annual inflation rate in Canada rose to 0.5% in September from 0.1% in the previous month.

Month-on-month, Canada’s consumer price index decreased 0.1% in September. Core consumer prices in Canada increased 1% in September over the same month in the previous year.

Retail sales in Canada increased 0.4% month-over-month in August, rising for the fourth consecutive month after hitting a record 24.8% fall in April.

The material has been provided by InstaForex Company – www.instaforex.com

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