US Dollar Under Pressure as Hopes for Stimulus Rise
The US dollar is trading under pressure close the lowest levels in a week as the risk sentiment in markets receives a boost over rising hopes for the US to announce the next round of stimulus measures to prop up its economy. At the time of writing, the US dollar index DXY is trading around 92.77.
During an interview with Fox News in the previous session, US President Donald Trump indicated his willingness to increase to scope of the coronavirus relief bill despite opposition from his party members. Traders have taken this as a positive sign that the stimulus could be announced before the upcoming presidential elections.
Anticipation of more stimulus measures is weighing on the US dollar and sending it lower, while giving investors a reason to move towards riskier currencies. This has sent the Euro towards the highest levels in a month; however, the NZD and AUD have not benefitted as markets worry about RBNZ taking interest rates into negative territory while the RBA could announce more monetary easing.
The US dollar is likely to face downward pressure even if lawmakers do not succeed in finalizing the next round of financial aid as this could hamper economic recovery in the country. Later today, the greenback could see some movement on the release of the Fed’s Beige Book, which could shed light on the state of the economy.
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