The U.S. dollar exhibited weakness against most of its peers on Wednesday amid increased risk appetite on hopes the new U.S. government under Joe Biden will come out with a big stimulus to bolster economic recovery.
The Biden administration is expected to implement its near $2 trillion fiscal stimulus plan. Further, the speeches by Biden and new Treasury Secretary Janet Yellen indicate more relief is on the way.
The dollar index, which was down at 90.28 in the Asian session, rallied to 90.70 around late morning, but faltered and slipped below the flat line as the day progressed. It ended the session at 90.50 and edged lower subsequently to 90.45.
Biden, who was sworn in as the 46th President of the U.S., has called for additional stimulus and an accelerated coronavirus vaccine rollout, which has helped offset concerns about higher taxes and increased regulation under a Democratic administration.
U.S. Treasury Secretary nominee Janet Yellen has pledged to “act big” on stimulus to reinvigorate the economy hit by the coronavirus pandemic.
In economic news, a report from the National Association of Home Builders showed an unexpected drop in U.S. homebuilder confidence in the month of January.
The report said the NAHB/Wells Fargo Housing Market Index fell to 83 in January after sliding to 86 in December. The continued decline surprised economists, who had expected the index to come in unchanged.
With the unexpected decrease, the housing market index pulled back further off the record high of 90 set in November.
The material has been provided by InstaForex Company – www.instaforex.com