Stimulus Package Under Threat

Clearly not content to go quietly, President Trump has been back in the spotlight this week over his opposition to the recently agreed US fiscal stimulus bill. Congress earlier this week signed off on a $900 billion package which includes $600 billion in direct stimulus ($600 checks to most Americans) along with $300 billion in unemployment benefits and other support. The figure represents a concerted effort on behalf of both parties to strike a compromise and help support the economy and is both lower than the figure desire by Democrats and higher than the figure desired by Republicans. The package is part of a broader spending bill which includes foreign aid as well as $1.4 trillion in funding for federal agencies over the next nine months.

Trump Opposed To Foreign Aid

However, Trump has claimed that the package is a “disgrace” and has voiced significant opposition to what he deems “wasteful” expenditure within the budget. Specifically, Trump has taken issue with the funding for foreign countries saying: "This bill contains $85.5m for assistance to Cambodia, $134m to Burma, $1.3bn for Egypt and the Egyptian military, which will go out and buy almost exclusively Russian military equipment, $25m for democracy and gender programmes in Pakistan, $505m to Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama." Trump went on to question the $40 million due to go to the performing arts complex, the Kennedy Center which isn’t open and questioned the more than $1 billion allocated to museums and galleries in Washington.

Continuing with his statement, Trump said: "Congress found plenty of money for foreign countries, lobbyists and special interests, while sending the bare minimum to the American people who need it. It wasn't their fault. It was China's fault.

"I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000 or $4,000 for a couple.” The president went on to say: "I'm also asking Congress to immediately get rid of the wasteful and unnecessary items from this legislation and to send me a suitable bill, or else the next administration will have to deliver a Covid relief package."

Veto Risks

Trump’s opposition presents a big risk give that the bill can only go ahead if he signs off on it. If Trump decides to veto the bill, federal agencies will be cut off from funding for the next nine months and will have to close as of midnight next Monday. However, despite his opposition, Trump has not yet said if he will veto the bill.

Technical Views

DXY

The Dollar index is fighting to move back above the 90.50 level having broken below the level last week. For now, price remains within the broad bearish channel which has framed the recent decline and the outlook remains skewed towards further declines in the near term. To the topside, the next key resistance is at the 91.74 level with the bear channel top coming in just above.

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