The US dollar has broadly underperformed most major currencies over the past week, in conjunction with the new US President Joe Biden's call for more fiscal stimulus. / p>
The Biden administration proposes a new stimulus package to address the Corona crisis, worth up to $ 1.9 trillion, that includes providing aid to various states, sending direct checks to citizens, extending unemployment benefits and providing more funding To face the pandemic.
It is also indicated that the new administration is preparing a second economic stimulus plan worth billions of dollars that will increase spending on infrastructure, green energy, health care and education, which will be at least partially funded. By increasing taxes on the wealthy and corporate.
On the other hand, Janet Yellen, former chair of the Federal Reserve and US Treasury Secretary in the new administration, announced her support for the approval of more stimulus spending at a hearing to approve the Appointed before Congress.
Yellen said that historical low interest rate levels should be leveraged to provide more fiscal stimulus rather than worrying about mounting debt burdens.
Yellen added: The burden of interest on debt as a percentage of GDP is not higher now than it was before the 2008 financial crisis, despite the fact that our debt is Has escalated.
Therefore, the Senate Finance Committee has urged that big steps be taken now and focus instead on the interest being paid and the returns that would be generated by supporting the economy.
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This new direction of financial policies by the Biden administration led to the rise of US stocks to unprecedented levels, but at the same time it returned the bearish trend of the already low dollar Fundamentally.
The massive financial stimulus to the world's largest economy coupled at the same time with low interest rates motivates investors to pump more money into higher-yielding currencies in light of the sentiment. Optimism toward a rapid US-led economic recovery.
