On Thursday, House Speaker Nancy Pelosi said the two sides are “pretty close” to reaching an agreement, and I’m not going to spend five seconds on these conversations if we don’t make progress. As a result, spot gold quickly recovered from its lows to above the $1,900 an ounce barrier, while U.S. stocks pared losses. However, Ms Pelosi later warned that it would take time for the agreement to become law as she and the Trump administration tried to resolve outstanding issues. U.S. National Economic Adviser Dan Kudlow said there were still major policy differences over the COVID-12 aid negotiations that were “unlikely to be resolved.” For now, markets are turning to the debate between U.S. President Donald Trump and Democratic presidential candidate Joe Biden.
House Speaker Nancy Pelosi said Thursday that while Democrats and the White House are close to a novel Coronavirus stimulus, writing and voting ona bill could take longer.
Pelosi said Thursday that a new coronavirus aid agreement was “within reach.” She added: “If we don’t make progress, I’m not going to spend five seconds on these conversations. I think it’s just a serious attempt. I believe both sides want to reach an agreement.”
The California Democrat plans to speak again Thursday with U.S. Treasury Secretary Steven Mnuchin to try to craft a bailout deal. While Ms Pelosi said the two sides were “pretty close” to reaching a deal, she warned that it would take time for a deal to become law as she and the Trump administration try to resolve outstanding issues.
“If we can resolve some of these issues in the next few days, it will take some time to draft legislation,” Pelosi told reporters on Capitol Hill.
The Speaker said the two sides still do not agree on several issues that have dogged negotiators during months of on-again, off-again negotiations. These include aid to state and local governments, corporate accountability protection, and funding for the U.S. census and election system.
Late Wednesday, President Trump took to Twitter to accuse Democrats of not being willing to find an acceptable compromise, while senate Republicans’ strong opposition to a massive new economic stimulus plan left negotiations on the Novel Coronavirus aid bill in doubt.
U.S. National Economic Adviser Nicholas Kudlow said significant policy differences remain over the COVID-19 aid negotiations. The wider policy differences between the administration and House Democrats over the coronave-aid negotiations are “unlikely to be resolved”.
Investors were also digoring U.S. jobless claims, which fell more than expected but remained at extremely high levels, suggesting the economy is recovering from the coronavirus pandemic as the boost from previous fiscal stimulus fades and the labor market slows.
Claims for jobless benefits in the US fell to 787,000 last week, the lowest level since the start of the outbreak and down 55,000 from a revised 842,000 the previous week. Economists polled by Dow Jones had expected 875,000 new claims in the week ended October 17.
“This back-and-forth between Pelosi and the White House may not have any real effect because at the end of the day they seem to be running out of time,” said Kathy Lien, managing director at BK Asset Management in New York.
“Between now and the election, we are almost likely to hear more bad news, or at least no good news, which will prompt investors to sell the dollar,” she said.
Mr. Trump and The Democratic presidential candidate, Joe Biden, are likely to discuss the stimulus plan later Thursday in their final debate before the election.
Caution in global markets was heightened by news that Europe has seen a record number of new cases of the coronavirus, with Spain becoming the first western European country to have more than 1m infections.
That backdrop appears to be favorable for the dollar, which has fallen against a basket of major currencies over the past three days.
The euro fell 0.3 percent to $1.1862, below Wednesday’s one-month high of $1.18805.
“Given the novel Coronavirus surge and the FACT that the ECB will have no choice but to lower interest rates, the euro has been unreasonably strong,” Lien said.
She said she would be closely watching Friday’s eurozone PMI report, which could trigger further declines in the euro.
The tone of the currency markets was generally subdued as investors waited for fresh momentum.
“With only 12 days to go until the U.S. presidential election, no one wants to make too much commitment in either direction,” said Esther Reichelt, currency analyst at Commerzbank.
Spot gold suffered two short-term sell-offs, falling more than $20 to a new session low of $1,893.33 an ounce and falling more than $30 from a session high, but then climbed above $1,900 an ounce from the low, buoyed by Pelosi’s upbeat comments.
Independent analyst Robin Bhar said gold is following a volatile dollar as investors focus on “whether the fiscal stimulus package will be agreed before the election or whether it will have to wait until the next President is voted on because of the time crunch.”
Gold is likely to trade sideways “until we know who the next President will be,” but could break through the $1,950 level after the election, Bhar added.
Stocks wobbled on Thursday after Ms. Pelosi hinted again that Democrats and the White House were making progress on a U.S. economic stimulus package.
In intraday trading, the Dow was down 25 points, or 0.1%. The index had fallen 170 points before rising slightly. The Standard & Poor’s 500 indexes fell just 0.1%. The Nasdaq composite index fell 0.4%.
“With no end in sight, the economy needs additional financial support for several months,” Prajakta Bhide, strategist at MRB Partners, said in a note. “The passage of a large additional fiscal stimulus early next year and the timely approval of health care plans to better manage next year’s COVID-19 pandemic will be critical to ensuring sustained economic growth next year.”