USD Nears Multi-Year Lows

The dollar remained near multi-year lows in early European trade Tuesday over concerns as to stimulus talks and the Fed’s policy-setting meeting ahead.

The new coronavirus stimulus aid package is still struggling to get through Congress, but lawmakers are now considering splitting the $908 billion stimulus bill into two parts, in order to make it easier for some of it to go through. The first part will consist of a $748 billion proposal that will include aid for vaccine distribution and unemployed benefits, and the other -  $160 billion bill for state and local support and temporary Covid-19 liability protection. Given that Congress has until the end of the week to let the bill pass, markets are not feeling at their most ease.

Another major topic on the agenda of the week is the Federal Open Markets Committee press conference. Treasury Secretary - Stephen Mnuchin, said late November that he would not reauthorize several Fed lending programs after New Year’s. As the year is coming to an end, and the programs are lapsing, the Fed may need to announce new stimulus measures at the conference Thursday.

By 07.55 GMT, the Dollar Index, which tracks the greenback against a basket of six other currencies, was largely flat at 90.688, after sinking as low as 90.419 on Monday, a level unseen since April 2018.

*The products advertised are only available to clients under Fondex Limited Seychelles (SDL No: SD037).