US Dollar Weakens as Positive Data Dents Its Safe Haven Appeal

US Dollar Weakens as Positive Data Dents Its Safe Haven Appeal

Posted Thursday, October 1, 2020 by
Arslan Butt • 1 min read

Early on Thursday, the US dollar is trading weak after falling to the lowest levels seen in a week amid expectations that the next round of fiscal stimulus measures could be approved soon by lawmakers. At the time of writing, the US dollar index DXY is trading around 93.69.

US Treasury Secretary Steven Mnuchin confirmed that his discussions with House Speaker Nancy Pelosi on the scaled-down coronavirus relief package were making progress, especially on the issue of direct payments. However, later during the day, Mnuchin remarked that he did not find the $2.2 trillion bill acceptable, but would prefer a package close to $1.5 trillion instead.

The US dollar also lost some of its sheen as a safe haven currency on the release of optimistic economic data. The latest ADP report revealed that private payrolls had increased since the previous month while manufacturing in the Midwest also posted a faster than expected rise.

Later today, the dollar could see some movement on the release of ISM manufacturing figures as well as weekly jobless claims numbers for the previous week. To close out the week, the biggest moves will be seen on the release of the NFP report on Friday.

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