The Greenback Remains Resilient As The Bulls Drive Equities Higher

The second element is on the negotiations over the $1.9 trillion stimulus President Biden has proposed. While bipartisan talks continue, the Democratic leadership in the Senate is pressing forward with the parliamentary procedure "reconciliation," which allows it to pass with a simple majority. However, under such a procedure, the stimulus bill will be smaller, and some elements, like the minimum wage increase, will have to be dropped. The alternative proposal includes funds to combat the virus, and it would lower the amount of the "universal income" to $1000 instead of $1400 while tightening income limits. It includes less generous unemployment benefits. The $170 bln Biden proposed for schools was cut to $20 bln. Obama is criticized for "squandering the legislative advantage the Democratic Party enjoyed. At the same time, Biden seems to recognize that his majority gives him little room to maneuver. Moreover, the administration is believed to be preparing to unveil a larger stimulus and infrastructure bill.  

The Canadian dollar has been choppy, but it continues to trade within last Friday's range (~CAD1.2740-CAD1.2875). Rising equities and oil prices support the Canadian dollar, but the firmer greenback more broadly is fostering an extended consolidative phase. The same story more or less held for the Mexican peso, but the dollar briefly slipped through last Friday's low (~MXN20.0860) in thin turnover as Asia was winding down and Europe was opening. While the greenback recovered, re-establishing a foothold above MXN20.20 may prove difficult.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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