Fundamental Comment

Dollar rises to record high amid stimulus hopes

Dollar rises to record high amid stimulus hopes

The U.S. dollar continued to rise on Wednesday, supported by facilitating action to support the global economy in its challenges against the huge impact of the Corona epidemic.

As of 07:55 GMT, the U.S dollar index, which measures the performance of six major currencies against the greenback, traded at 100.01, resuming its good performance for a seven straight session, noting that it hit its highest level since April 2017 at 100.20.

The dollar continued to perform well after President Donald Trump's administration continued to take stimulus measures to support the economy affected by Corona, with more than 5,000 casualties in the United States.

According to a press release, the administration will ask Congress for an $850 billion stimulus package to help the U.S. economy cope with the effects of Coved-19.

For his part, the U.S. Treasury Secretary said the administration is trying to put money in the hands of citizens to help them cope with the corona epidemic.

"Americans need money now, I mean in the next couple of weeks," Mnuchin said at a White House press conference on Tuesday. "President Donald Trump has told me that we have to do this now”.

The Federal Reserve also announced credit facilities to provide financing to companies affected by the novel virus.

The U.S. Central Bank said in a statement on Tuesday that it will provide special credit facilities to buy securities to companies from issuers who were having difficulty finding buyers on the open market.

Corporate securities include short-term lending that is not guaranteed to finance the business, the statement said.

The Fed added that the one-day facility would include a three-month paper for eligible companies, and the cost would be the three-month swap rate for the index plus 200 basis points.

US Stock gains

U.S. stock indexes rose at the end of Tuesday’s session as the Dow gained more than 1,000 points supported by hopes of stimulus after recording the worst daily performance since 1987.

The Dow Jones Industrial Average rose 5.2 percent, or 1,048.8 points, to 21,237, the S&P 500 climbed 6 percent to 2,529.1 points and the Nasdaq Composite rose 6.2 percent to 7,334.7 points.

The yield on the 10-year U.S. Treasury bond rose one percent as markets recovered.

Share Article