U.S. Dollar Drops As Stimulus Optimism Reduces Safe Haven Appeal
The value of the U.S. dollar has moved to the downside over the course of trading on Tuesday, with the U.S. dollar index sliding 0.26 points or 0.3 percent to 90.45.
Currently, the greenback is trading at 103.62 yen compared to the 104.05 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2159 compared to yesterday’s $1.2144.
The drop by the dollar comes as unrelenting optimism lawmakers will eventually agree on a new fiscal stimulus bill reduced the appeal of safe havens.
House Speaker Nancy Pelosi has scheduled a meeting with other congressional leaders to discuss a relief package.
Pelosi is due to meet with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer and House Minority Leader Kevin McCarthy, while Treasury Secretary Steven Mnuchin will participate by phone.
In a post on Twitter on Monday, Pelosi’s Deputy Chief of Staff Drew Hammill noted the Speaker and the Treasury Secretary spoke by phone and “discussed the urgency of the committees finishing their work as soon as possible.”
Hammill said Pelosi reiterated Democrats’ concerns about liability provisions, which remain an obstacle to securing state and local funding.
The conversation between Pelosi and Mnuchin came as bipartisan group of lawmakers publicly released their latest proposal, which was largely in line with a report from Reuters on Monday.
The proposal calls for a previously unveiled $908 billion bipartisan relief plan to be split into two proposals that could be voted on separately in order to win approval.
One bill would be a $748 billion measure including money for small businesses, the jobless and COVID-19 vaccine distribution, while the other would include more controversial measures such as liability protections for business and aid for state and local governments.
Further reducing the appeal of safe havens, the Federal Reserve released a report showing U.S. industrial production rose by slightly more than expected in the month of November.
The report said industrial production climbed by 0.4 percent in November following a downwardly revised 0.9 percent advance in October.
Economists had expected industrial production to rise by 0.3 percent compared to the 1.1 percent jump originally reported for the previous month.