By Olga Cotaga
LONDON, Oct 6 (Reuters) – The dollar stabilised on Tuesday after weakening against most currencies in earlier trade, as rising optimism that U.S. lawmakers could agree on new stimulus to blunt the economic impact of the coronavirus dampened demand for safer assets.
Risk appetite also improved after U.S. President Donald Trump left hospital and returned to the White House following treatment for COVID-19, a development viewed as reducing political uncertainties in the near term.
The lead taken by Trump’s presidential opponent Joe Biden in polls ahead of next month’s election is also seen as negative for the U.S. currency.
“The increasing possibility of a “blue wave” (Democrat control of the White House and Congress) that would open the door for much-needed fiscal stimulus would be a welcome development for risk assets and could undermine the U.S. dollar,” said Lee Hardman, currency analyst at MUFG.