The dollar crept up on Thursday morning in Asia, with revived hopes for some U.S. spending improving sentiment and whetting investor appetite for riskier currencies.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, inched up 0.0% to 93.683 by 10:11 PM ET (2:11 AM GMT).
After shaking markets by halting the talks between Democrats and Republicans over the latest stimulus measures, U.S. President Donald Trump suggested via Twitter on Tuesday that he would be open to gradual spending measures.
However, doubts remain that any measures will be passed before the Nov. 3 presidential elections, now just weeks away, despite House of Representatives Speaker Nancy Pelosi continuing to advocate a standalone bill for aid to airlines.
“It looks like they still can’t agree on a bigger package … if they could get an agreement on that, you’d get a bit more of a reaction and the U.S. dollar would fall,” Commonwealth Bank of Australia (OTC:CMWAY) currency analyst Joe Capurso told Reuters.
Investor sentiment also improved with hints of even more spending from the U.S. Federal Reserve in its minutes from its September meeting. The notes matched expectations that the Fed would unleash more fiscal spending, but some investors would be open to further debate about the Fed’s bond buying program.
“This nuance did not come across in Powell’s post-meeting press conference nor in recent speeches … in that vein it is worth noting that the Fed’s (Loretta) Mester on Monday said she might support shifting asset purchases to more longer-dated bonds,” National Australia Bank (OTC:NABZY) economist Tapas Strickland said in a note.
Fed officials Eric Rosengren and Raphael Bostic will be delivering speeches later on in the day, these could potentially provide further clues about the Fed’s internal debates.
The USD/JPY pair inched up 0.07% to 106.03, with the safe-haven yen sinking to a three-week low of 106.11 per dollar overnight.
The AUD/USD pair inched down 0.04% to 0.7136. The NZD/USD pair was down 0.24% to 0.6563, with a Reserve Bank of New Zealand official telling a media briefing that the central bank is "actively working" on negative interest rates and a funding-for-lending program.
The GBP/USD pair inched up 0.05% to 1.2925. The pound was dogged by concerns over the latest informal Brexit talks between the U.K. and the European Union. Bank of England Governor Andrew Bailey joined a panel discussion on the impact of COVID-19 later in the day, where he is expected to cover negative rates or other policy considerations.
The USD/CNY remained at 6.7908. Chinese markets are closed for a holiday.
Investors are also looking to the debate between the U.S. Vice President Mike Pence and Democrat vice presidential nominee Kamal Harris, currently underway.
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