Dollar steadies as trading buffeted by U.S. stimulus

Dollar steadies as trading buffeted by U.S. stimulus

22 Oct 2020 09:33 AM

The U.S. dollar steadied against most major currencies on Thursday as U.S. stimulus talks remained the focus for markets with trading buffeted over recent days by the extent of progress made on the potential size of the aid package.

The dollar index was nearly flat against a basket of currencies at 92.801, having marked its lowest level since Sept. 2 overnight.

On Wednesday, the dollar weakened after U.S. President Donald Trump and House Speaker Nancy Pelosi boosted hopes an agreement on stimulus was close, sparking demand for riskier assets.

But prospects remain dim for the Republican-controlled Senate to approve any aid before the Nov. 3 election.

Nancy Pelosi said before starting talks with Treasury Secretary Steven Mnuchin that there was still a chance for a deal despite resistance from Senate Republicans, though she acknowledged it might not pass until after the election.

Separately, Federal Reserve Governor Lael Brainard said the biggest risk to her outlook for economic recovery was that fiscal support from the federal government would be withdrawn too soon.