Dollar dithers in thin trade as Trump passes pandemic aid package
The dollar largely shrugged off President Donald Trump’s decision to relent on a threat to block a Covid-19 aid bill in thin trading on Monday with many investors on holiday.
The pound hovered below a 2-1/2-year high in the Asian session following the agreement last week of a narrow Brexit trade deal that does not cover Britain’s financial sector.
The dollar index was little changed at 90.37, following a three-day slide.
Sterling dipped 0.9% to $1.3432, inching away from the $1.3625 mark it hit earlier this month for the first time since May 2018.
Trump signed into law the $2.3 trillion pandemic aid and spending package, averting a partial federal government shutdown that would have started Tuesday.
The euro was little changed at $1.2207, near the 2 1/2-year high of $1.2273 touched this month.
Brussels has made no decision yet on whether to grant Britain access to the bloc’s financial market.
Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in Tokyo, expects the pound and euro to decline against the dollar, reaching $1.30 and $1.15 respectively by the end of the summer.
“Regardless of the Brexit deal, cable will be down,” he said.
“It’s buy the rumor, sell the fact.”
Treasury yields rise after Trump signs Covid relief bill
Treasury yields climbed on Monday after President Donald Trump signed a $900 billion Covid-19 relief bill into law.
The 10-year Treasury yield, which moves opposite to prices, rose 2 basis points to 0.954%. The 30-year Treasury bond rate jumped 4 basis points to 1.700%.
Trump averted a government shutdown late Sunday, and extended unemployment benefits to millions of Americans. The signing came days after Trump suggested he would veto the legislation, demanding $2,000 direct payments to Americans, instead of $600.
Reference: CNBC
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