Tuesday trading might see the dollar on the back foot: Apart from the market data, there are tensions with China, updates on the fiscal stimulus deal, and Covid-19 related developments determining the market mood.
Fiscal stimulus deal is not likely this week, and we might have to wait till next week, according to media reports quoting Democratic Speaker of the House Nancy Pelosi. Also, it has been reported that Republicans have put an upper ceiling of one trillion US dollars for the stimulus package. Talks will resume today as the earlier Federal unemployment benefits package expired last week.
Charles Evans, President of the Chicago branch of the Federal Reserve, was quoted as saying that the Fed already did its part and it is up-to-the Congress to do the rest.
The contraction in hiring and the below 50 employment reading acted as a dampener in better than expected ISM Manufacturing Purchasing Managers’ Index readings released yesterday. Today, Factory Orders are due for release as the market awaits Friday’s Non-Farm Payrolls with increased anxiety.
Fight against Coronavirus received new hope in a treatment called RLF-100, and it is on a fast-track in the United States. The US Vice President Mike Pence meanwhile expressed anticipation for a vaccine by the autumn. Regeneron Pharmaceuticals’ drug proved effective in animals, and the company is hopeful regarding further progress.
Covid-19 figures today from Florida, Texas, California, and other states are vital as yesterday numbers were exceptionally low, attributed to the weekend effect.
Tensions with China have put the focus on the social network TikTok, and the US will allow the sale of its operations to Microsoft or any other US company until September 15.
Reserve Bank of Australia’s concern regarding the Covid-19 fallout and its decision to resume bond buying didn’t deter AUD/USD from trading above 0.71. The country’s trade balance surplus didn’t meet expectations, but the retail sales surprised with a rise of 2.7 Percent in July.
Euro is trading above 1.1750 against the US dollar as the Eurozone PMI showed upbeat reading amidst the scare of Covid-19. GBP/USD trades near 1.30 as London ponders further measures against the pandemic including lockdown.
