Buck holds steady after U.S. stimulus passed

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Buck holds steady after U.S. stimulus passed

DECEMBER 22, 2020

The U.S. Dollar remains mostly subdued, especially against its European counterparts, following an overnight session in which it was announced that the U.S. Congress managed to pass a spending bill that prevents shutdown and aids the economy.

Overview

Overall, the $2.3-trillion package covers necessary year-end items, but it will produce a check of $600.00 for most Americans. The result did not increase optimism in markets as the global rally is now fading with COVID-19 forcing more travel restrictions and lockdowns in newly re-affected regions. Risk-taking certainly taking a back seat as the year come to a tough end with Brexit talks again stuck after British proposals were rejected this morning by the European bloc.

Figures this morning confirmed that the third quarter was at least a very strong one for the U.S. with Gross Domestic Product showing that it made a tremendous comeback by growing 33.4%. At the moment of writing, all currency pairs is losing to the buck. We will get a slew of data gauging November and December strength tomorrow.

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EUR  

The Euro is slightly higher but could face trouble as Brexit heads into deeper uncertainty right before end of year with many member nations shutting down again to prevent the spread of a new strain of the coronavirusIndeed, it has not been just the U.K. impacted by a new strain, but it is already finding its way not other countries. In the next two days, we will see data for member nations that could paint a clearer picture of how rough the last six weeks may have been for a partial shut EU.

GBP  

The Pound fell by almost half a percent overnight and seems to have more room to fall as a U.K. attempt to concede some ground to get a deal with the EU was rejected. Prime Minister Boris Johnson is now trying desperately to come up with something acceptable in order to not trade under WTO rules once 2021 begins. The situation is a frustrating one since it looked like progress was being made and that making peace regarding fishing would be the last item to solve. Nevertheless, the reality of a four-year divorce is here: neither party wants to give the other a chance.

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