The U.S. dollar is being crushed by uncertainty. Negotiations on a fiscal stimulus package that should help the world’s strongest economy to recover significantly are constantly dragging on. Investors are thus increasing their risk premiums, which is reflected in the dollar’s weakening against major currencies.
The fiscal stimulus package does not seem to pass the US Congress any time soon. News of renewed negotiations between US Treasury Secretary Steve Mnuchin and House speaker Nancy Pelosi has led to the US dollar weakening to its lowest level in 2.5 years.
The $908 billion support program should fund compensation for entrepreneurs, especially hoteliers, restaurant owners or operators, and other small business owners. Support programmes should run until the end of March next year. But the proposal encounters displeasure among Democratic lawmakers, and the Senate bill is also at stake.
Investors feel an increasing risk, leading to the dollar gradually shed and looking for other currencies to invest their excess liquidity in. Against the dollar, perhaps all the world’s major currencies are strengthening, most notable the euro or the New Zealand dollar.
