Pelosi Deadline Looms For Pandemic Bill

Clock Ticks Away for Pre-Election Stimulus

The US dollar index continued its slide from the beginning of the week, as it closed 0.35% lower yesterday.

Fiscal stimulus negotiations continue to largely drive the direction of the US dollar.

This comes as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin made some progress during their latest coronavirus stimulus talks.

They plan to speak again today about a relief bill, ahead of a two-day deadline that Pelosi set to reach an agreement.

Any breakdown in stimulus negotiations would likely send the US dollar higher into the November 2020 election.

Pandemic Counteraction Brings Deficit into the Red

The euro pounced on the greenback’s weakness on Monday as it closed 0.43% higher.

This comes despite recent reports that the eurozone’s budget deficit is expected to rise nearly tenfold.

A draft budget plan published by member states on the European Commission’s website indicates the 19-country bloc will slide to an aggregate fiscal deficit of almost €1 trillion.

ECB President Lagarde continues to call on continued fiscal and monetary support to avoid further losses of viable businesses.

Brexit Uncertainty Continues

The pound ended yesterday’s session 0.38% higher on the back of further uncertain Brexit negotiations.

After last week’s EU summit drawing no conclusion, Downing Street seemed to announce that talks have ended. However, reports have indicated that the EU has succumbed to some of the UK’s demands, leading to further confusion.

Britain was also hit hard by new restrictions as Wales became the next country to enforce a 2-week lockdown, starting from Friday.

Manchester was also placed on a ‘very high’ alert level recently. The mayor has been given a deadline of midday to reach a deal with the government over moving to tier three COVID restrictions.

Indices Hit By Stimulus Stalemate

The US stock market witnessed a sell-off on Monday due to fiscal stimulus talks shifting market sentiment.

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