So far this week, the US dollar has lost 0.32 percent against a bundle of its main competitors, falling for the second consecutive week.
Last week, US President, Donald Trump confirmed that he is infected with the coronavirus. Despite the concerns regarding the health of the president, Trump was finally discharged from the hospital, returning to the oval office this week. According to his doctor, the president has had no symptoms for more than 24 hours, while being fever-free for more than 4 days.
Many criticized Trump’s late behavior, given his tendency to underplay the virus. In any case, he seems to be doing well and took the opportunity to announce his decision to withdraw from the stimulus talks with the Democratic party, promising to pass a bill after the November elections.
“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major stimulus bill that focuses on hardworking Americans and small business,” he posted on his Twitter account.
This caused unease across the US stock markets, which closed in the negative territory at the end of Tuesday’s session.
Afterward, he said on his Twitter account that he is willing to sign a stand-alone bill for stimulus checks. He also called the Democrats to approve a 25 billion dollars stimulus for the airline sector, as well as a paycheck protection program for small businesses that is worth 135 billion dollars.
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Trump’s latest announcements relieved investors, making US stocks recover from the previous session’s losses.
The United States continues dealing with the Covid-19 sanitary crisis, which so far has killed 216,784 Americans and has infected 7,776,224. The United States leads the world in the number of infections, followed by Brazil, India, Russia, and Colombia. Cases are currently surging in 39 states, as states like Wisconsin have doubled its number of reported cases in the last month, all while Trump’s latest declarations about the issue keep alarming the medical community.
This week the markets received a few relevant pieces of information about the state of the US economy. On Monday, Markit economics released the Services PMI for September, which stood at 54.6, remaining unchanged from the previous month’s figure and signaling an expansion of the sector. The composite PMI figure signaled a slightly lower expansion of the business sector, standing at 54.3 in September, below August’s 54.4 and lower than what the analysts’ expected. According to the Institute for Supply Management, the services PMI stood at 57.8, improving from August’s 56.9 and over the analysts’ expectations, who foresaw it to be at 56.3.
On Tuesday, the Bureau of Economic Analysis reported a 67.1 billion dollars deficit in the trade balance, after being at -63.4 billion in the previous month, and higher than the analysts’ expectations, who foresaw it to be at -66.1 billion. The Federal Reserve Chair, Jerome Powell called for additional fiscal stimulus, saying that it’s preferable to do too much than too little and claiming that economic recovery will be stronger and faster if monetary policy and fiscal policy “continue to work side by side”.
On Wednesday, the Federal Reserve released the FOMC minutes. In the minutes, the bank’s monetary policy committee stated that they are not willing to raise the interest rates until the economy reaches full employment and inflation reaches the bank’s 2 percent target. The Federal Reserve officials also expressed their concerns about the threat that the lack of help from the Congress poses for economic recovery.