Dollar Up, Pelosi Stimulus Deadline Nears - INVESTING.COM
By Gina Lee
Investing.com – The dollar was up on Tuesday morning in Asia, with doubts over the status of the latest U.S. stimulus measures continuing to linger. The Chinese yuan continued near a two-year high against the dollar over signs of continued economic recovery in the country.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, inched up 0.05% to 93.477 by 10:09 PM ET (2:09 AM GMT).
U.S. shares took a hit on Monday over doubts that Congress will pass the stimulus measures ahead of the Nov. 3 presidential election, now two weeks away.
House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin “continued to narrow their differences” in a telephone conversation on Monday, her spokesman said.
Pelosi hopes that there will be “clarity” on whether the measures will be passed by the end of her self-imposed Tuesday deadline to reach a deal with Republicans.
However, investors remain unconvinced that a deal will be reached before the deadline.
“Although Pelosi has set a Tuesday deadline for a deal, it does not seem like she has a clear conviction that there will be an agreement … markets probably still think a deal before the election is unlikely,” Barclays (LON:BARC) senior strategist Shinichiro Kadota told Reuters.
The USD/JPY pair wedged up 0.15% to 105.57.
The USD/CNY pair edged up 0.11% to 6.687, reversing earlier losses. Investors are still digesting the Chinese quarterly growth data released on Monday, which showed that the GDP grew 4.9% year-on-year in the third quarter, less than expected. However, the data showed a continuous recovery for the world’s second-largest economy overall, helping offshore yuan to reach its strongest level since July 2018 and surpass its 2019 peak.
The AUD/USD pair was down 0.35% to 0.7043. The AUD continued a third consecutive day of losses over increasing speculation that the Reserve Bank of Australia (RBA) will introduce further monetary easing measures soon.
RBA Assistant Governor Chris Kent said earlier in the day that the RBA board is considering further monetary policy easing, including expanding its bond buying program to include longer-dated government debt. Kent's statement was corroborated by the minutes from RBA’s October meeting, which revealed that RBA discussed the possibility of further monetary policy easing, including cutting the cash rate towards zero and buying longer-dated government bonds, during the meeting.
“These options would have the effect of further easing financial conditions in Australia,” the minutes said.
Across the Tasman Sea, the NZD/USD pair fell 0.42% to 0.6576.
The GBP/USD pair inched down 0.05% to 1.2940, as Brexit negotiations between the U.K. and the European Union (EU) floundered. Although U.K. chief Brexit negotiator David Frost warned there was no basis to resume talks with the EU unless there is a fundamental change in the body’s approach to negotiations, some investors still held onto hope that the two sides could salvage the post-Brexit trade talks to prevent a no-deal ending to Brexit, with the drama dragging on into a fifth year.