FOREX-Dollar dips on stimulus optimism, bets on Biden victory

  • Reuters
  • Forex News
FOREX-Dollar dips on stimulus optimism, bets on Biden victory
Credit: © Reuters.

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds details, updates prices; previous LONDON)

By Karen Brettell

NEW YORK, Oct 9 (Reuters) - The dollar fell to three-week lows on Friday as optimism that a deal for new U.S. stimulus would be reached, and as investors bet that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.

After stalling talks with Democrats on a comprehensive aid package earlier this week, U.S. President Donald Trump on Thursday called for a "skinny" relief bill that would include elements such as direct payments and a bailout of the struggling airline sector. Majority Leader Mitch McConnell said another rescue package was needed but noted "vast differences" over costs. U.S. House of Representatives Speaker Nancy Pelosi said legislation to help airline companies could only move through Congress with guarantees that a comprehensive aid bill would be developed too. seems like, at least in the White House, there is more of a sense of urgency that it needs to be done,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto. However, “the key question for us is whether or not the Senate Republicans are going to go with it … they don't seem to be united.”

“I think we're more or less in a standstill until we get some more clarity on whether or not this stimulus package is going to go through,” Rai said.

The dollar index against a basket of major currencies =USD fell 0.34% to 93.23, the lowest since September 21. It has held within a range from 91.74 to 94.75 since late July.

The euro EUR= rose 0.45% to $1.1811. The greenback weakened 0.16% against the Japanese yen JPY= to 105.84 yen.

The U.S. currency also fell on rising expectations that Biden will win the Nov. 3 election, and that Democrats could win the Senate. A Democratic victory would likely result in larger stimulus, which would be negative for the dollar.

Rising expectations of a Biden victory has also boosted appetite for currencies that have been hurt by the trade war between Washington and Beijing, with the Chinese currency the biggest beneficiary.

The offshore yuan CNH= strengthened to 6.6801, the strongest since April 2019.

The pound was steady, brushing off worse than expected UK growth data as investors became more optimistic about a Brexit deal being reached ahead of a key European Council summit next week. GBP= was last up 0.29% at $1.2970.

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Currency bid prices at 9:24AM (1324 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=

$1.1811

$1.1758

+0.45%

+5.36%

+1.1817

+1.1754 Dollar/Yen

JPY=

105.8400

106.0100

-0.16%

-2.77%

+106.0400 +105.8200 Euro/Yen

EURJPY=

125.00

124.69

+0.25%

+2.50%

+125.0900 +124.5300 Dollar/Swiss

CHF=

0.9116

0.9167

-0.56%

-5.81%

+0.9177

+0.9116 Sterling/Dollar GBP=

1.2970

1.2933

+0.29%

-2.18%

+1.2976

+1.2922 Dollar/Canadian CAD=

1.3141

1.3194

-0.40%

+1.19%

+1.3202

+1.3132 Australian/Doll AUD=

0.7213

0.7166

+0.66%

+2.73%

+0.7218

+0.7161 ar

Euro/Swiss

EURCHF=

1.0770

1.0780

-0.09%

-0.76%

+1.0789

+1.0769 Euro/Sterling

EURGBP=

0.9107

0.9087

+0.22%

+7.72%

+0.9131

+0.9077 NZ

NZD=

0.6638

0.6572

+1.00%

-1.45%

+0.6642

+0.6576 Dollar/Dollar

Dollar/Norway

NOK=

9.1798

9.2623

-0.89%

+4.57%

+9.2751

+9.1786 Euro/Norway

EURNOK=

10.8450

10.8940

-0.45%

+10.24%

+10.9109

+10.8413 Dollar/Sweden

SEK=

8.8142

8.8565

-0.11%

-5.70%

+8.8736

+8.8136 Euro/Sweden

EURSEK=

10.4087

10.4202

-0.11%

-0.58%

+10.4510

+10.4110

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