The Dollar rose against a basket of currencies in early London trading, and was interrupted by its downtrend when. s. Treasury Secretary Stephen Mnuchin has called for an end to some epidemic lending from the Fed.
Mnuchin’s move reallocated about $ 455 billion allocated to the Treasury for other spending, but some investors were concerned about ending programs they believed had played a vital role in reassuring markets.. 10 years from USA. And US Treasury yields fell to their lowest level since November. 9.
The Federal Reserve also said it “would prefer that the full suite of emergency facilities established during the pandemic continue to serve their important role as an anchor,” a rare open confrontation with the government.
The announcement dampened optimism stemming from reports that Republican and Democratic senators have agreed to resume talks about another coronavirus stimulus package..
The dollar index was at 92. 335 at 0801 GMT, steady in the day after sliding overnight and then rising again with the opening of European markets. Analysts have also cited the spike in COVID-19 cases as a reason for caution.
“We do not see that this dispute that broke out between the US Treasury and the Federal Reserve has a major impact on the financial markets.. Sure, something like this is not good news at all but at the end of the administration it should mean that the risk of actual damage to the real economy is limited, ”writes MUFG head of research Derek Halbene.
Halbeni also said that the potential lack of a smooth transition between governments in Washington « creates an additional uncertainty that only reinforces the need for the Federal Reserve to fill the policy vacuum when it meets on Dec. 16, » which will keep. s. The weakening of the dollar.
However, the dollar fell by about 0. 5% over the course of the week, as currency market sentiment was boosted by the U. s. President-elect Joe Biden wins and progress toward a COVID-19 vaccine.
The Australian dollar – seen as a liquid proxy for risk appetite – is seeing its best month against the US dollar. s. The dollar since April, in terms of percentage change.
The Euro was steady against the Dollar at $ 1. 18725 at 0825 GMT, on track for a small weekly gain.
“There is simply a lack of new drivers at the moment to allow the EUR / USD pair to break out of the 1 range. 16-1. 19, « wrote the strategist at Commerzbank U-Na Park Heiger.
“Yes, there is still optimistic news about a possible vaccine, but the euphoria over this question has subsided significantly,” she said, adding that the European Central Bank is expected to increase the stimulus in December.. .
European Union leaders clashed Thursday over the objections of Hungary and Poland to Bloc 1. 8 trillion euros ($ 2. 14 trillion) recovery plans, but decided to allow more time for agreement. The euro was not affected. Strategists from ING wrote: “We tend to believe that a common solution will eventually be found (in line with previous examples of EU disputes) that removes the hurdle of further EUR / USD appreciation in 2021, and signals the broader weak dollar environment”.
Elsewhere, Bitcoin came close to â €? But it did not go beyond: A three-year high on Wednesday at $ 18,483.
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Federal Reserve System, Stephen Mnuchin, US Treasury
World News – US – Dollar is rising after Mnuchin halted some federal emergency funds
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