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Saturday, April 10, 2021

The US Dollar Has Started Dipping With The Inclusion Of The US Stimulus

The last week saw quite a lot of action, with the US Dollar dipping after President Trump signed the latest Covid-19 relief bill. Also, the Swiss franc went down to its lowest amount in the last 7 months. This was partly due to the Brexit deal still gaining traction. The Swiss franc fell by around 0.3%, to come to a ratio of 1.08860 against the euro- something that has been its lowest since June. Against the US Dollar, the franc remained unchanged- 88.835 cents. 

How Has The US Dollar Been Affected Through This All?

Ulrich Leuchtmann, the head of research at Commerzbank has already spoken about how they are currently seeing a continuation of pricing that has been bred out of Brexit risk. He further mentioned how they have been seeing quite a lot of participants expecting the Swiss Franc to be a replacement for the Euro. He added that investors might just close out those positions in the ensuing sessions. 

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The US saw quite a development with President Trump signing a $2.3 trillion relief package for COVID- something that definitely helped avoid a federal government shutdown. This led to the US Dollar dipping around 0.3%- which was placed against a basket of currencies. 

This boost to risk appetite will also be affecting the safe-haven government bonds, such as the 10-year US treasury. This bond has been known to yield close to 2 basis points by around 0.95%. The 10-year yield of Germany remained unchanged at around -0.55%. 

The pound sterling added around 0.1% against the US dollar to set it up to $1.3551. It has been setting its sights on the $1.3625 mark- what it hit previously in this month. The pound seemed to be nearing that level- especially when the EU and GBR brought out their trade deal.

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