US Dollar Strengthens After Trump Delays Next Round of Aid Until After Election
Arslan Butt • 1 min read
The US dollar is trading somewhat strong against other major currencies on Wednesday after President Trump unexpectedly cancelled further discussions on the coronavirus relief package until after the presidential elections. At the time of writing, the US dollar index DXY is trading around 93.69.
While the news does not bode well for the US economy, the dollar gained as a safe haven currency due the heightened uncertainty in the economic outlook. In addition, fiscal stimulus measures weigh on the currency and make it weaker, and this latest news delaying the next round of financial aid served to strengthen the greenback.
Trump made this announcement via Twitter, calling off further talks with Democrats on the next round of stimulus even as cases in the US continue to climb higher and economic recovery falters. The US dollar received an additional boost as a safe haven currency after Fed chairman Jerome Powell cautioned that country’s economy could spiral into an even worse downturn if the pandemic worsens and there is no financial aid to support recovery.
Meanwhile, the US dollar continues to hold on to its gains against the Euro and the GBP from the previous session. Despite encouraging updates about trade negotiations between Britain and the EU, gains in the dollar keep GBP/USD weaker.