The dollar index, which measures its evolution against a basket of 6 reference currencies, fell 2% in 4 weeks, returning Wednesday evening to 92.61 points, the lowest since early September.

While stock market volatility in recent days has reflected some doubts about the rapid adoption of a new fiscal stimulus plan in the United States, the currency and sovereign rate markets seem to believe in a massive new program to support the economy in the face of the coronavirus crisis.

Thus, the dollar index, which measures its evolution against a basket of 6 reference currencies, fell by 2% in 4 weeks, returning Wednesday evening to 92.61 points, the lowest since the beginning of September. Increased optimism surrounding a new US stimulus package helped boost demand for riskier currencies, to the detriment of the greenback.

The euro, on the other hand, rose to $1.1860, its highest since mid-September against the greenback.

Note that the dollar has now fallen to its lowest level since July 2018 against the Chinese yuan renminbi, at 6.6411 yuan/$ (+0.5% on Wednesday), the Chinese currency having been supported in recent weeks by the fairly solid rebound of the Chinese economy following the coronavirus pandemic.

On the US bond market, the yield on the 10-year government bond (T-Bond) rose from 0.66% on September 25 to 0.81% on Wednesday evening, rising to the highest since June last. This rebound in rates bears witness to the prospects of an acceleration of the economic recovery in the event of the adoption of a new budgetary support plan.

The US Senate far from convinced by the urgency of a massive plan

In Washington, the discussions, which have lasted for three months, on this new recovery plan seemed to be moving towards a positive outcome on Wednesday, just two weeks before the American presidential election on November 3. Democratic Speaker of the House of Representatives Nancy Pelosi and Treasury Secretary Steven Mnuchin continue their discussions and expressed their optimism about a possible agreement. According to the American press, Donald Trump and the White House would now agree on a plan of 1.880 billion dollars, while the Democrats are still demanding 2.200 billion dollars.

The fact remains that the Senate, dominated by Republicans, remains reluctant to face the idea of a new massive plan, which could complicate things, despite this desire to agree. Senate Majority Leader Mitch McConnell said the Senate will vote Wednesday on a limited and targeted $500 billion relief package. He also said that in the event of an agreement between Pelosi and the White House, the Senate would consider the text … But according to the media, McConnell on Wednesday called on the Republicans and the White House not to conclude a large-scale agreement with the Democrats ahead of the November 3 election...