The U.S. dollar was reportedly up slightly in early European trading on Thursday. The major currencies are in a narrow move as market participants continue to digest a potential rift between U.S. Treasury Secretary Steven Mnuchin and the Federal Reserve Organization lately.
The index of USD, which tracks the greenback primarily against six other currencies, was up as much as 0.1% at 92.325. The figure is just above this month's low of 92.129. Previously, the US Dollar had weakened against risky currencies in the market.
This weakening occurred for more than a week as drug manufacturers continued to report progress towards the Covid-19 vaccine. As is known that there are some vaccines known to have high effectiveness rates such as Pfizer and Moderna. However, they still need more time.
Currency Data in the Market
The EUR/USD pair fell 0.1% to 1.1870. Elsewhere, USD/JPY increased by 0.1% to 103.86. Meanwhile, the risk-sensitive AUD/USD also fell 0.1% to 0.7286. If you look at the condition, it is still volatile. The global currencies are not stable yet now.
U.S. Treasury Secretary Steven Mnuchin called for some Federal Reserve pandemic loans to be terminated immediately. This happened when he asked for $455 billion allocated to the Treasury Department under the CARES Act to be allocated again for other expenditures.
The central bank later responded that it publicly disagreed with the move. This is the first sign of a lack of harmonious relations between these two important bodies and sparked concern from some investors. Some parties are then ready to make strategies for any possibilities.
It is especially true for investors who rely on central bank support to help the dollar as a safe haven. Investor concerns could make currency conditions unstable. This situation could have an impact on commodity markets as well such as on oil and gold.
Will Stimulus Negotiations Continue?
The move makes the greenback's previous situation in the global market was worse. It was especially so after the emergence of earlier reports that the U.S. Senate of Republicans and Democratic leaders had agreed to continue negotiations on a stimulus package soon.
The fund's assistance is for other coronaviruses. The number of weekly initial claims is known to have risen on Thursday for the first time in five weeks. The announcement of a lockdown by some countries makes things still gloomy until now.
It is because restrictions caused by a spike in Covid-19 cases halted the recovery in the job market. For information, California ordered a curfew imposed on all indoor social gatherings and outdoor activities that will be held by people.
The conditions are especially for non-essential activities to be ified. Meanwhile, the country's top public health agency is pleading with Americans not to travel for Thanksgiving in order to break the contagion link. The hope is to end the pandemic soon.
GBP/USD Reportedly Rising
Elsewhere, the GBP/USD currency pair rose as much as 0.1% to 1.3270. That was triggered by UK retail sales rising by 1.2% in October, and 5.8% higher than a year earlier. This is contrary to growth forecasts which happened.
Growth forecasts have slowed to 4.2% as consumers start their Christmas shopping early. However, news of the chances of a trade deal between the UK and the EU continues to be a major driver of sterling in the market.
This means that the movement of economic data tends to be limited. Several EU countries have urged the European Commission to report on Brexit plans without a deal. The situation adds to doubts about the possibility of progress in negotiations.
That was conveyed clearly by an analyst at ING in a study. These days it will be very important for Brexit. Therefore many may expect a big move in GBP at any time. If this happens, it is expected that market conditions will be better.
