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Friday, March 5, 2021

Here’s How Trump’s Latest Tweets On Stimulus Check Has Affected The US Dollar

On Wednesday, Donal Trump tweeted that the White House has stopped all Stimulus Check negotiations with Speaker Pelosi. The tweet also stated that the second stimulus package talks will resume only after the November elections. This resulted in a negative setback of the US dollar. However, after a second tweet by the President indicated that he is willing to support a direct payment stimulus package, things have somewhat stabilized. How long will this last? 

After the first tweet, the US stock market saw an increase in safe-haven asset demand. It looks like the stock market investors are looking to secure their gains before things descend into chaos. 

Stock Market Investors Brace Themselves For Risk Amidst High Tensions Around Stimulus Check

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After the President indicated a delay of nearly two months in the second round of the stimulus package, the Wall Street investors braced themselves for fresh risks in an already volatile US stock market. 

As has been reported by analysts, the US dollar is trading on thin grounds. It has been depending on positive stimulus check outcomes. 

The first shock began to stabilize after the White House announced that the President has requested Congress an extension to the $25 billion payroll assistance. This financial aid will most likely stimulate the shaky US airline industry. 

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As for the fate of the US dollar in the global stock market, investor sentiments in Asia improved almost instantaneously. 

As per market analysts, stock market investors are more likely to make riskier trades with high caution since uncertainties over the stimulus check have revived after Trump’s latest tweets. 

In a note to investors by ING strategists, it’s said everyone needs to trade with caution as an immediate stimulus check does not seem possible anytime soon. They further said that cyclical FX needs to be kept soft to help the US dollar stay safe. 

Where Does The US Dollar Stand In Relation To Other World Currencies

In the European stock market, the US dollar fell by 0.18 percent standing at $1.1754 per Euro. In the last session, the US dollar had increased by 0.4 percent. 

Last Tuesday, Pound had fallen by 0.86 percent. However, it currently stands at $1.2915, which is a 0.36 percent increase. 

The Australian dollar, on the other hand, increased by 0.57 percent, currently standing at $0.7142. 

Experts believe that the Australian stock market is riskier than ever since the Australian Reserve Bank plans of buying government debts and cutting rates. 

Even though the US dollar seemed to have stabilized since the initial Trump tweet. It’s not recovered enough to improve against Yen. It stands T 105.75 JPY = D3. 

On Tuesday, Jerome Powell stated on the immediate need for the second stimulus check to improve the US dollar standing. 

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