ForexLive Asia FX news wrap: Trump does not want to sign the COVID-19 relief bill
Forex news for Asia trading for Wednesday 23 December 2020
- Risk getting sold off more heavily now on Trump's obstruction of the relief bill
- Pelosi says eager to provide $2,000 checks
- US Senator Graham says relief bill will save lives, sooner it becomes law the better
- US Democrats pile on in support of $2,000 checks for Americans
- Japan chief cabinet secretary Kato says the country will tighten border measures on arrivals from the UK
- Here's what happens if Trump will not sign the US COVID-19 relief bill
- Biden considering boosting vaccine production with Defense Production Act
- PBOC sets USD/ CNY reference rate for today at 6.5558 (vs. yesterday at 6.5387)
- FX option expiries for Wednesday December 23 at the 10am NY cut
- USD selling off further - Trump issues pardons to convicted felons
- Minutes of the BOJ October Monetary Policy Meeting
- UK media report a UK/EU Brexit trade deal is again possible Wednesday (this AGAIN???)
- US SEC charges against crypto firm Ripple continues to reverberate, XRP lower again
- US Dept of Homeland Security to warn on data security if using China-linked firms
- UK media say that the government is preparing to place more areas under Tier 4 lockdown from December 26
- Brexit - UK media cites EU officials - EU does not have much room to manoeuver on fisheries
- Trade ideas thread - Wednesday 23 December 2020
- Private oil survey data shows a headline build in crude oil inventory
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: