The euro rose back towards 1.22 and the dollar declined on Wednesday as foreign exchange traders looked beyond U.S. President Donald Trumps threat not to approve a 892 billion COVID19 aid package.
Trump said the longawaited stimulus package should be amended to increase the amount in the stimulus checks potentially disrupting the bill.
But foreign exchange markets were little changed, with the dollar edging lower and currencies deemed riskier, such as the Australian dollar, making solid gains.
The financial markets have not reacted notably to this threat from President Trump to block the package our sense is there remains an expectation that Trump will sign it in the end, MUFG analysts said in a research note.
They added that the markets indifference could shift to risk aversion and a rebound for the dollar if Republicans in the Senate blocked Trumps larger stimulus demand.
By 0835 GMT, the dollar was 0.1 lower against a basket of currencies.
The dollar index has dropped more than 6 this year as investors bet the U.S. Federal Reserve will keep its policy ultraeasy. Expectations for further declines by the dollar are helping buoy stock markets and emergingmarket currencies.
The euro climbed 0.2 to 1.2183.
Sterling rose nearly 0.5 to 1.3442 amid speculation the European Union and Britain will announce a Brexit trade deal on Wednesday.
The pound has been jolted up and down on hopes for a deal before Britains Brexit transition period ends on Dec. 31. Most foreign…