China Taps the Brakes
Daily Forex Signals – China made it easier for traders to bet the yuan will fall in value.
China Taps the Brakes – Dollar Edges Higher as Stimulus Talks Stumble; Losses Loom
FxPremiere.com – The dollar edged higher in early European trade Monday, with negotiations over the latest stimulus measures in the U.S. seemingly in difficulties as the election approaches.
At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 1% at 93.108, regaining a little ground after recording its biggest loss in six weeks on Friday, falling to a near-three-week low of 92.997.
Elsewhere, EUR/USD dropped 0.1% to 1.1814, USD/JPY was down 0.1% at 105.50, GBP/USD was flat at 1.3050, while the risk-sensitive AUD/USD fell 0.2% to 0.7227.
The dollar had been hard hit Friday on hopes that a deal for new U.S. stimulus would be reached, reducing the need for this safe haven currency, after the Trump administration proposed a new $1.8 trillion package.
However, this offer ran into opposition from both sides, with the Democrats saying it was not comprehensive enough and the hard-line Republicans worried about the extent that this would increase the country’s debt pile.
“A ‘blue wave’ U.S. election and favorable news on the vaccine timeline could return the trade-weighted dollar and DXY index to their 2018 lows.”
The yuan hit a 17-month high on Friday, having gained more than 6% against the dollar since late May. At 2:55 AM ET, USD/CNY traded 0.3% higher at 6.7160.