Dollar stays low

    511

    TOKYO- The dollar stayed near a 2 1/2-year low on Wednesday as investors cautiously eyed developments in talks about further fiscal stimulus from the United States, while risk currencies held onto gains on improving risk appetite.

    Against major currencies, the dollar index fell 0.7 percent to 91.318, having hit its lowest level since late April 2018 of 91.263 overnight.

    The Euro and the Kiwi steadied after an overnight jump to their 2 1/2-year highs as the dollar broadly weakened.

    US Treasury Secretary Steve Mnuchin and House of Representatives Speaker Nancy Pelosi held stimulus talks for the first time since the election, while a bipartisan group of senators and House members proposed $908 billion worth of coronavirus relief measures.

    Pelosi said in a statement after the talks that Mnuchin would review coronavirus relief proposals.

    US Senate leader Mitch McConnell said on Tuesday that Congress should include a fresh wave of coronavirus stimulus in a must-pass $1.4 trillion spending bill aimed at heading off a government shutdown in the midst of a pandemic.

    “The currency market is sceptical whether these proposals could be agreed in a swift manner, since hopes were shattered once already when a stimulus package didn’t come into fruition before the presidential election,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

    “Traders are closely eyeing for convincing clues that the agreement is actually reached,” he said.

    Also weighing the safe-haven dollar was weaker-than-expected US manufacturing activity data and speculation that the Federal Reserve will act to support the economy before vaccinations become available.