The stability of the US dollar globally after the stimulus package talks were suspended

[Mary B]

The stability of the US dollar globally after the stimulus package talks were suspended

 

 07 October 2020 01:16 PM

Direct : The US dollar stabilized globally against a basket of major currencies during trading on Wednesday, before the Federal Reserve minutes and after the stimulus talks were suspended.

And after his infection with the Coronavirus sparked uncertainty in global markets at the end of last week, US President Donald Trump returned to shock investors again by postponing the stimulus talks that many depend on to support the economy until after the presidential elections.

And US Federal President Jerome Powell called for continued fiscal and monetary stimulus in order to recover the economy affected by the shock of the epidemic.

Investors will be awaiting the release of the minutes from the Federal Reserve regarding its recent meeting later in the day.

By 9:30 GMT, the dollar fell against the euro by about 0.2 percent to $ 1.1758, but it rose against the Japanese yen by 0.4 percent to 106.02 yen.

The US currency fell against the pound sterling by 0.1 percent to 1.2897 pounds, but it stabilized against the Swiss franc to 0.9177 francs.

During the same period, the main dollar index, which measures the currency’s performance against 6 major currencies, settled at 93.704.

https://www.mubasher.info/news/3704183/استقرار-الدولار-الأمريكي-عالميا-بعد-تعليق-محادثات-صفقة-التحفيز?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ar%2FISX%2Fnews+(ISX+Arabic+News)

[Mary B]

The empire of the "dollar" .. The Financial Times expects its collapse at the end of next year for these reasons

19:26 - 10/07/2020

 

  

Information / follow-up.

The Financial Times expects the dollar’s price to collapse by as much as 35% of its value by the end of 2021.

The newspaper attributed the reasons to the collapse of domestic savings and a large current account deficit.

According to the figures, net domestic savings, saving by consumption for households, companies and the government sector, have returned to the negative territory for the first time since the financial crisis in the second quarter of 2020.

US net domestic savings of -1.2% in the second quarter was 4.1 percentage points lower than the first, the largest quarterly drop in records dating back to 1947.

Unsurprisingly, the current account deficit followed suit, pushing the current account deficit to -3.5% of GDP in the second quarter, 1.4 percentage points lower than that in the first period in the biggest quarterly decline on record.

The newspaper mentioned how the dollar index previously declined by 33% in 1970 and in the mid-1980s, and 28% between 2002 and 2012.

As for the Washington Post, it stopped at Trump's statement that the US stimulus talks had been postponed until after the presidential elections, which led to the decline of the Dow Jones Industrial Average by about 330 points, or by 1.2%.

With the approaching US presidential election, the bond markets in the largest economy in the world are witnessing a sharp decline in the yield curve on debt instruments, in an unmistakable sign that investors fear that the Democrats will win the upcoming elections.

A report published by the "Financial Times" indicates that the significant decline in the US bond yield curve anticipates the occurrence of a "blue wave" scenario, which is Biden's victory in the upcoming elections, and expectations of tight monetary policies by the Fed on the impact of the election results.

In Tuesday's trading, the yield on US 5-year bonds was below the yield on 30-year terms of about 1.27%, in the largest widening of the yield curve since 2016, amid a record wave of selling by investors for long-term bonds. 25 S.

https://www.almaalomah.com/2020/10/07/498858/