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US Dollar Slips on Trump Signing Coronavirus Relief Package

December 28, 2020 at 13:11 by Andrew Moran

One dollar note with a pyramidThe US dollar is showing some weakness to start another holiday-shortened trading week as investors’ risk appetite increased on President Donald Trump signing the coronavirus relief and government spending packages. Despite hesitation from Trump over the last week, he signed the legislation into law, giving the broader financial markets some gains in the final few sessions of 2020.

When Congress announced that it approved a $908 billion coronavirus relief and stimulus bill and a $1.3 trillion government spending plan, the president called it a “disgrace.” He was not happy with the $600 stimulus checks, as well as the billions of dollars in what he described as waste.

Trump said in a statement issued Sunday:

I will sign the omnibus and COVID package with a strong message that makes clear to Congress that wasteful items need to be removed.

Much more money is coming. I will never give up my fight for the American people!

Democrats had given what Trump wanted, namely $2,000 income-support payments to Americans, but they refused to budge on cutting the waste in the bill. After days of apprehension, Trump approved the bill, but announced that the State would “start the process for a vote that increases checks to $2,000.” Trump also confirmed that he would send Congress a “formal rescission request” requesting “wasteful items” to be removed from the bill.

Although the COVID-19 relief bill enhances unemployment benefits by $300 for 11 weeks and extends $285 billion in forgivable Paycheck Protection Program loans, it also contains some questionable spending items. Some of these include $10 million for gender programs in Pakistan, nearly $90 million to buy Congress new furniture, an additional $25 million for staff salary, and $566 million for new construction projects for the FBI.

What was also controversial was the fact that the legislation was more than 5,000 pages long, and lawmakers had only a few hours to read it before voting on it.

The bond market was green across the board, with the benchmark 10-year bond up 0.03% to 0.96%. The one-year note edged up 0.005% to 0.101%, while the 30-year bond jumped 0.043% to 1.709%.

In pre-market trading, the broader financial markets were mostly in the green, with the leading indexes up at least 0.5%. US crude oil prices advanced 1.1%, while gold slipped 0.25%.

The US Dollar Index, which measures the greenback against a basket of currencies, dipped 0.04% to 90.29, from an opening of 90.32. The index is coming off a weekly gain of 0.3%, but it will record a 2020 loss of at least 6%.

The USD/CAD currency pair fell 0.3% to 1.2836, from an opening of 1.2875, at 12:02 GMT on Monday. The EUR/USD advanced 0.11% to 1.2211, from an opening of 1.2191.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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