Mnuchin: Very close to deal on COVID-19 stimulus bill

Ross J Burland FXStreet

US Treasury Sec Mnuchin has explained that negotiators are very close to deal on COVID-19 stimulus bill trying to finish on Monday night.

We have been witnessing the Republican and Democratic senators and Trump administration negotiators trying to find common ground on the coronavirus stimulus bill to no avail so far,

"I think we're very close," Mnuchin told reporters, while shuttling between offices in the U.S. Capitol. "We're trying to finish it up tonight," he said.

Stimulus supporting a softer dollar?

Meanwhile, Credit markets were initially positive on the Federal Reserve news from overnight whereby the Central Bank has announced a broad set of initiatives designed to support the interest rate markets and businesses. The initiatives included open-ended purchases of treasury, agency and mortgage-backed securities, a new USD300bn fund to provide consumer and business credit flow, two facilities for large employers, support for the corporate bond market, Term Asset-Backed Security Loans to support consumer and business credit, and business lending programs to support SMEs.

The US dollar has stumbled in it northerly and higher bid trajectory on Monday and Tuesday, with a slightly less hectic FX market place. Deflationary pressures could be starting to be factored in by the markets, but the situation is highly fluid and trying to pick a top probably isn't the favoured trade at this time. However, the downside case for the dollar is compelling when considering the opened ended QE.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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