US Dollar Holds on Above Two-Year Low
Arslan Butt • 1 min read
The US dollar continues to hold on to its recent gains early on Tuesday, rising above two-year lows amid optimism about the coronavirus relief bill getting finalized soon, even as US Treasury bond yields edged higher. At the time of writing, the US dollar index DXY is trading around 93.52.
Previously, the US dollar had seen seven consecutive weeks of decline over worries of economic recovery in the US getting delayed as a result of a continued rise in the number of coronavirus infections and deaths in the country. To make matters worse, the US Congress’s failure to pass the next round of stimulus to support the economy also exerted downward pressure on the greenback.
The US dollar’s decline was stemmed by President Donald Trump’s decision to sign an executive order over the weekend to restore unemployment benefits that had lapsed a few days ago. The executive order also suspended payroll taxes, offering some relief amid the heightened economic uncertainty prevailing in the economy.
The dollar benefited from encouraging comments from leaders of the Congress expressing willingness to restart negotiations on the coronavirus relief bill. While the Democrats have proposed stimulus measures worth $3 trillion in the next round, Republicans want to bring down the amount to around $1 trillion, leading to a stalemate.