The dollar languished near fresh 2-1/2-year lows against its major rivals earlier today as progress toward agreeing a U.S. stimulus package and a Brexit deal boosted risk appetite at the expense of the safest assets. Congressional negotiators were “closing in on” a $900 billion COVID-19 aid bill, lawmakers and aides said on Wednesday, with the tone the most positive it’s been in months. The Federal Reserve vowed to keep funneling cash into financial markets until the U.S. economic recovery is secure, a promise of long-term help that fell short of some investors’ hopes of an immediate move to shore up a recent pandemic-related slide.
Positive soundings from the European Union on Brexit talks helped lift the British pound yesterday above to its highest level against the dollar since May 2018. The EU’s chief executive said that she could not say if there would be a trade deal with Britain but there had been progress and the next few days would be critical.
The Bank of England is in focus today, though any moves may be on hold until there is clarity on Brexit and the impact of vaccinations.