The trade-sensitive Australian Dollar pared losses in the Asian session Westpac withdrew its call for the Reserve Bank of Australia (RBA) to cut rates in October.
The safe haven US Dollar slipped southwards versus its major peers, whilst the safe haven Yen ticked higher.
Gold lost ground and silver plunged 1.6% even though US 10-year Treasury yields held steady at 0.66%.
European Central Bank President Christine Lagarde is due to speak later, in an otherwise quiet session. Attention will turn to the live Trump – Biden debate tomorrow, September 29.
USD Strength Questionable Amid Renewed Stimulus Optimism
House Speaker Nancy Pelosi’s lifted optimism surrounding a fiscal stimulus agreement by saying that the rescue package could still be delivered before the US Presidential Election in. Appetite for riskier assets rose dragging on demand for the US Dollar.
Pelosi said that the Democrats could make a new proposal in the coming days trusting that Secretary Mnuchin will help find a solution and an agreement.
Clear obstacles remain given Democrats are calling for at least $2.2 trillion in new aid and President Donald Trump has indicated his limit is $1.5 trillion.
Nevertheless, with Pelosi saying that “I’d rather have a deal that puts money in people’s pockets than to have a rhetorical argument”, optimism of some form of fiscal aid before the November 3 election is rising.
Fiscal stimulus negotiations could drive the safe haven US Dollar’s in the near term outlook, any sign of progress could underpinning risk-associated assets.
Fauci made upbeat comments regarding a vaccine , voicing his expectations that at least one would be widely available in the US by March or April of next year
Fauci, the NIAID Director considers that if a successful vaccine is developed the US will be moving back to normality by the second half of next year, although he added that there is no guarantee that an effective vaccine will ever be discovered.
The markets focus on the positive vaccine update buoying investor sentiment which could terminate the USD /JPY’s recent rally from multi month lows.