The U.S. dollar was struggling to keep a rare rally together on Monday

The U.S. dollar was struggling to keep a rare rally together on Monday The dollar’s weakness was exacerbated this week by the lack of progress in a new US coronavirus aid package. Republicans and Democrats at Congress are still “far apart on some very significant issues,” according to comments from Treasury Secretary Stephen Mnuchin on Thursday, and after the previous stimulus package ended in July. Market players remained concerned about the future of the world’s largest economies, trading on coronavirus-related headlines rather than on macro releases. The U.S. dollar was struggling to keep a rare rally together on Monday as its longest losing streak in a decade left much of the market structurally short of the currency and vulnerable to a squeeze on any upbeat news. Yet the dollar still ended lower for the seventh week in a row. The euro edged up to $1.1791 on Monday, having hit a two-year high of $1.1915 last week, which now acts as major resistance. Support comes in around $1.1755 and $1.1694.  

Economic growth kept slowing

  Turnover was light with Tokyo on a holiday and considerable uncertainty on whether U.S. policymakers can agree a new package of fiscal support for the virus-hit economy. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday said they were open to restarting COVID-19 aid talks, after President Donald Trump took executive actions on unemployment benefits. Data released these days showed that the situation is worse in the US than in the EU, at least for now. Against a basket of currencies, the dollar was a fraction firmer at 93.339 and just above a two-year trough. The dollar was a little steadier on the yen at 105.75, well above the recent low of 104.17 but facing stiff resistance at 106.46. Investors were wary of a new flare-up in China-US tensions.