After news arrived that fiscal aid talks will resume in Washington, the US dollar stabilized just below its two-month high. Other weaker global currencies strengthened as well. This is the best US dollar performed since April.
Meanwhile, the European economy is taking a setback after investor sentiment sours due to a possible second wave of coronavirus and lockdowns.
Increasing numbers of COVID-19 cases in France has led many to believe the European nation will be the next COVID-19 hotspot. Responding to it, top lawmakers have expressed a need for another round of nationwide lockdowns.
US Dollar Gets A Boost After Lawmakers Say A Coronavirus Stimulus Aid To Be Approved Most Likely By Next Week
As for the US dollar, after a Wall Street rally, stocks increased dramatically. As per reports, this boost can be attributed to a democrat lawmaker, who apparently claimed that the party was working in the House of Representatives to secure a 2.2 trillion stimulus aid. And, that the coronavirus fiscal aid will most likely be approved by next week.
Now, if we divert our attention to other major currencies, we will find that the Australian dollar increased by 0.5 percent. That’s around 0.7086 at 0724 GMT. Even though the Australian dollar saw a growth, it’s still doing very badly in opposition to the dollar. This week was recorded as one of the worst weeks for the Australian dollar against the US dollar since last March.
The New Zealand Dollar increased by 0.6 percent as well. That amounts to an increase of 0.6584.
Strategists from ING told. Wut clients that the US equities are finally showing positive signs. Everyone is hoping that the IS economy finally starts to get back up from the first COVID-19 hit.
They added that while the stock market might be tempted to go berserk with the latest update of a stabilizing US dollar, everyone must be cautious in their steps.
The bill at index rose by 1.3 percent during the week in opposition to 0.1 percent at 0738 GMT. This dramatic increase is the biggest in around six long months.
ING strategists also mentioned that the recovery of the global economy will most likely slow down since the second wave of coronavirus is being reported in Europe.
European Health Experts Warn Of A More Serious “Twindemic”
Even as the first wave of coronavirus has not subsided completely, new cases reveal more serious symptoms. Calling the new updates a “twindemic”, the European health experts warn people of COVID-19 inflection along with flu.
On Friday, the euro increased by 0.1 percent. However, the overall week shows a 0.4 percent decrease.
USB strategists stated that they expect the US dollar to strengthen further soon.