By Yasin Ebrahim
Invesing.com – The dollar extended its gains on Tuesday, thanks to a surge against the yen as risk appetite returned amid a rally on Wall Street after the Federal Reserve and the Trump administration rolled out new stimulus measures to combat the Covid-19 outbreak.
The pound moved off the lows against the greenback after the UK unveiled further stimulus measures to support businesses affected by the virus.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 1.77% to 99.88.
The Fed rolled out financial-crisis-era measures again this week after detailing plans to create a lending facility to support short-term commercial debt markets to avert a liquidity crisis from the impact of the coronavirus spread.
Treasury Secretary Steve Mnuchin, meanwhile, outlined a $850 billion stimulus package to support the economy, that could include payroll tax cuts, checks mailed to taxpayers and support for industries such as airlines that have been battered by the outbreak.
The stimulus initiatives underpinned the broader rebound on Wall Street, prompting investors to reduce bullish bets on the yen.
USD/JPY rose 1.30% to Y107.30.
Elsewhere, the pound fell 1.40% to $1.2094, but remained above session lows after the U.K. unveiled additional fiscal support to help businesses and prop up the broader economy.
U.K. Chancellor of the Exchequer Rishi Sunak pledged GBP330 billion of government-backed loans and more than GBP20 billion in tax cuts and grants to support businesses affected by the novel coronavirus.
Dollar Extends Gains Against Yen; Pound off Lows as U.K Unveils GBP330B Stimulus
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