Dollar Tumbles on Renewed Stimulus Optimism

Dollar

The dollar index, which measures the greenback against a basket of major currencies, declined sharply to 92.77, the lowest since mid-September amid renewed optimism over the fiscal stimulus package. President Donald Trump raised the chances of reaching a deal over the coronavirus relief bill by stating that he is ready to accept a large aid bill, despite the opposition from the republican party. The EURUSD rallied to $1.1862, the GBPUSD ascended to $1.3028, and the AUDUSD recovered to $0.7091.

Equities

Major US stock index futures continued to trade in a tight range awaiting fresh insight into stimulus talks. Investors are waiting for a clear decision before jumping into a position. The House Speaker Nancy Pelosi postponed the deadline of reaching a deal, as she continued to narrow the differences with the Treasury Secretary Steven Mnuchin. On the other hand, President Donald Trump is ready to accept a large aid bill, raising the prospects of reaching a compromise ahead of the awaited elections. The Dow Jones Industrial Average futures hovered above 28200, the S&P500 futures held steady near 3440, and Nasdaq futures declined to 11595 as Netflix missed earnings estimate.

Metals

Precious metals prices inched higher as the dollar weakened on stimulus hopes. The price of a gold ounce rallied to $1921, the price of a silver ounce edged higher to $25.14, and palladium futures soared to $2424.

Oil

Oil prices declined slightly despite optimism over stimulus. Investors are afraid of excess supply. The resurgence of covid19 is forcing governments to apply certain restrictions, which would weigh on the economic activity and oil-demand levels. On the other hand, the Libyan output is being pumped to the market, while OPEC+ is moving forward with the plan to ease output cuts in December. Moreover, the American Petroleum Institute reported a buildup of 0.584 million barrels in US oil stock. The West Texas Intermediate crude December delivery fell to $41.08, and Brent Blend December delivery tumbled to $42.49.

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