FOREX NEWS

ForexLive Asia FX news wrap: Trump does not want to sign the COVID-19 relief bill – ForexLive



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The long story short on
Trump’s objection to the COVID-19 economic relief bill that passed
Congress this week, and his refusal to sign it into law, is that
Trump has the power of an effective veto in his pocket. If he vetoes
the bill the US Senate has the ability to override the veto due to
the overwhelming majority with which the bill passed. The “but’
is that
Trump can effectively veto the bill by just not signing it, by
“sticking it in his pocket” (this potential move is literally
referred to as a ‘pocket veto’).

If
Trump does not sign, the bill is effectively dead once Congress
adjourns, it does not exist any more and the 7 months of negotiations
come to nothing, there is no bill for relief. Further,
if Trump does not sign, the US government will shut down on December
29.

You’ll
note in the posts above that the Democrats have supported the move to
have checks increased from $600 to $2000 and will move a
stand-alone bill on Thursday (US time) to provide for $2000 direct
payments by unanimous consent. Its difficult to see the Republican
Party supporting $2,000 checks though and thus its hard to avoid the
conclusion that we are back where we started. Of course, the
situation is fluid, that has just been proven once again, and
the focus for markets is back, once again, on developments in
Washington.

There
was little other news flow, although the latest Brexit item of note
is chatter of a potential deal on Wednesday. I think we are up to
number 5,000 of ‘today is the day for a deal’ or something like
that, so we’ll see if this one dies like all the others have.

For
currencies the early part of Asian trade saw the USD weaken, all
major currencies gained. Prior to Trump’s relief bill bombshell the
news hit he had issued further pardons to convicted felons. This was all forgotten
soon enough and currencies slumped against the dollar. However, this
slump was soon reversed and FX is back on the up against the dollar
as I update. Having said all this on the swings for the session the
ranges were not large, but still decent compared to the typical Asia
FX day. 

GBP net higher for the session:

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