Dollar Stabilizes as Anger Over Trump’s Stimulus Stance Dissipates

The dollar held steady on Wednesday as it tipped lower against most currencies after initially jumping after President Donald Trump canceled talks on economic stimulus with Democratic lawmakers in a move boosting demand for safe-haven assets.

Trump’s sudden decision to suspend stimulus talks until after the Nov. 3 presidential election sparked a sell-off on Wall Street as investors brace for the risks of a new downturn in the already battered US economy.

In general, analysts said the renewed uncertainty over the stimulus will encourage investors to trade riskier currencies cautiously.

In early European transactions, the dollar last traded at 1.1754 against the euro, down 0.18%, after rising 0.4% against the single currency in the previous session.

The pound traded against $ 1.2915, up 0.36%, after falling 0.86% on Tuesday.

The Australian dollar rose 0.57% to $ 0.7142, after falling more than 1.1% on Tuesday.

Traders say the Australian dollar faces more downside risks on expectations that the Reserve Bank of Australia’s next move will be to cut interest rates and buy more government debt.

However, increased risk aversion did not lead to a significant change in the dollar against the yen, as it was most recently traded at 105.75 yen, as analysts say there is a tendency to buy both currencies at uncertain times.