US Dollar Trades Cautious as Markets Await Brexit, Stimulus Developments
Early on Wednesday, the US dollar is supported by a cautious mood in global markets as traders await developments related to Brexit, more stimulus measures in the US and the upcoming ECB meeting later this week. At the time of writing, the US dollar index DXY is trading around 90.74.
Traders are returning to the safety of the US dollar, helping it rise higher from the two and a half year low it fell to late last week. Negotiations between Britain and the EU fail to make any headway, despite the deadline for the transition period only a few weeks away, increasing the risk-off mood in markets.
In addition, talks for the next round of stimulus in the form of the coronavirus relief package have also not managed to make much progress. The Trump administration has proposed financial aid worth $916 billion after Democrats in the Congress rejected the earlier plan with a narrower scope.
Later today, the US dollar could experience movement on the release of job openings data. With the US experiencing a spike in fresh coronavirus infections, traders are concerned that the economic recovery that had started has slowed down considerably, and are especially focused on the condition of the labor market in the country.
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