The US dollar finally began to show signs of strengthening on the first working day of this week. The growth took place against the euro, as well as against the Swiss franc. The main focus of market participants is now on the stimulus measures in the US, as well as the escalation of the conflict between Washington and Beijing. It should be noted that a new round of tension may seriously affect the course of the negotiation process between the countries on the issue of a trade agreement, which is scheduled for the end of this week.
The USD index against a basket of six major world currencies rose significantly by 0.19%, which allowed it to move to the level of 93.616 points and move slightly away from its minimum values.
The news about the signing of a long-awaited decree on a new portion of stimulus measures in the US added to the positive mood of investors. However, this was done in an unusual way: since the Democrats and Republicans failed to reach a consensus on this issue, President Donald Trump took full responsibility and signed the document without the approval of the majority. This, on the one hand, encouraged the markets, which were experiencing tension from hanging in the air and unsolvable problem. On the other hand, it made investors think about the future of such a stimulus policy since statistics presented last week and on Monday indicate improvements in the economy. This allows us to talk about a possible rejection of stimulating measures by the US government.
Meanwhile, the new portion of incentives will be smaller in volume. Thus, the payment to those who lost their jobs amid the coronavirus pandemic and entered the labor exchange will now amount to $ 400 per week instead of the previously paid $ 600 per week. Still, analysts say a reduced payout is better than no payout at all.
However, the USD began to grow at the end of last week. Then support for the dollar came from a new wave of conflict between the United States and China. Note that the US government decided to impose sanctions against some high-ranking officials from Hong Kong and China. The Chinese authorities responded almost immediately, and in turn, the country’s authorities imposed sanctions against eleven US officials. However, the matter is unlikely to be limited to this, and investors are already beginning to prepare for the next unfriendly steps.
All these forces market participants to turn again to a safer currency asset – the dollar, which makes its position more confident and its value higher.
The single euro has reduced its value against the dollar by about 0.3% and moved to the level of $1.1751 per euro.
Meanwhile, the Aussie has become cheaper by 0.17%: now it is traded in the area of $ 0.7145 per Aussie.
The Kiwi also sank by 0.26%, and the current mark was within the range of $0.6585 per kiwi.
The Swiss franc, which is traditionally considered a safe asset, also reduced its value by 0.6% and moved to the level of $0.9177 per franc.
The Canadian dollar remained practically unchanged at around $ 1.3383 per Canadian dollar.
The Norweigan krone also slightly corrected downward by 0.02%, its value moved to the area of 1.3383 krone per dollar.