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Dollar Gaining Strength After Biden’s Plan

The dollar index rose 0.8 percent against a basket of currencies to 90.78 points, while the euro lost -0.65 percent to $1.2078. After its low on January 6 at the conference, the greenback has rebounded by more than 1%, taking advantage of higher interest rates and potential inflation forecasts, due to the major fiscal stimulus in the United States.

Bitcoin dropped more than -10 percent over 24 hours, returning to about $35,640 on Friday.

In the bond markets, the 10-year T-Bond yield dropped 5 basis points on Friday to 1.08 percent, after touching 1.18 percent on Tuesday in the session, the highest since March 2020. In the aftermath of Fed President Jerome Powell’s remarks, rates eased that the U.S. central bank will alert investors “very early” before it intends to slash its government bond holdings.

The problem of “tapering” is currently not topical, Powell said, adding that the economy is “far from our goals” and that before withdrawing its funding, the Fed would wait until it has “clear evidence” of progress on jobs and inflation targets.

In the wake of the health crisis, Joe Biden unveiled Thursday a new $1,900 billion stimulus plan. The program provides $415 billion in funding for battling and vaccinating Covid-19, around $1,000 billion in immediate assistance to families, and $440 billion in aid to the most badly impacted small businesses and communities.

In comparison to the $600 paid by the $900 billion initiative voted for by Congress shortly before Christmas, $1,400 in checks would be paid to Americans. Unemployment insurance will be boosted from $300 to $400 a week and extended until September.

Democratic officials in Congress, where, in recent elections, the party secured a slim majority in both houses, have stated that they would do their best to enact the initiative quickly.

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