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Asian Markets fall on US Fiscal Uncertainty


The equity markets in the Asian and Pacific Rim were mostly in the red on Wednesday morning. Traders are watching the growing uncertainty surrounding the ongoing negotiations between the Democratic Party and the Republican Party (GOP), in the United States over another round of fiscal stimulus to support the fragile economic party.

Asian and regional traders are concerned that that the two political parties remain far apart on a deal. The $600 dollar per week in supplemental unemployment payments has expired and the U.S. central bank is warning that consumption will be severely impacted.

The benchmark Nikkei 225, in Japan, is down over half a percent by late morning hours and the broader Topix index, in Tokyo, is down 0.55 percent. The Japanese bourses saw two days of solid gains on Monday and Tuesday this week.

In Seoul, South Korea, the Kospi composite index is up 0.47 percent, as it bucks the regional downtrend. Elsewhere in the Asian and Pacific Rim, the Australian S&P ASX 200 is down a fraction of a percent.

Asian Traders monitor the Stalemate in the United States over Fiscal Stimulus

Traders are watching negotiations stateside over additional coronavirus fiscal support from Congress. The Democrats refuse to budge and the Republicans are leery about additional costs. The biggest sticking point seems to be over additional unemployment insurance.

Overnight, the benchmark Dow Jones Industrial Average gained 164.07 points to end at 26,828.47. The headline S&P 500 gained 0.36 percent to close at 3,306.51.

The U.S. dollar index, which measures the greenback in a basket of six currencies, was trading at 93.21 after falling to 93.6 on Tuesday.

The benchmark USD/JPY forex market is trading at 105.61 yen after hitting a high of 106.40 yen earlier this week. The AUD/USD currency exchange rate is trading at 0.7175 after recovering from its weekly low price point near 0.71.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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