Biden Stimulus package to be passed this week
US President Joe Biden’s USD 1.9 trillion coronavirus stimulus bill is expected to be passed by the House of Representatives this week, following Senate approval on Saturday.
Many US citizens were eager for the bill to be passed as soon as possible, given that existing unemployment support is due to end on 14th March. The bill will see USD 1,400 worth of stimulus cheques sent to the majority of Americans, which are set to be released this month.
US Treasury Secretary, Janet Yellen, stated that the substantial stimulus package would “provide enough resources to fuel a very strong US economic recovery.”
The House of Representatives will need to approve the Senate version of the bill which includes revisions such as reduced weekly stimulus cheques from USD 400 to USD 300 but extended to an extra week to 6th September 2021.
Joe Biden made clear that tackling the US’ unemployment crisis was his main priority as President, and already the situation appears to be improving. Last week saw the largest monthly expansion of non-farm payroll, with 379,000 jobs added in February.
FBI has made over 300 arrests in connection with Capitol Hill riots
After monitoring thousands of photos and videos of the Capitol Hill riots which took place on 6th January 2021, the FBI is said to have made over 300 arrests. Given that over 800 people were believed to have stormed the US Capitol Building in protest of the 2020/21 US elections, the FBI have even further arrests lined up two months after the incident took place.
At the time, former President Donald Trump uploaded a series of Twitter and Facebook election posts – which were swiftly removed –appearing to incite violence, urging his followers to descend on Washington after making false election fraud claims.
Vote counts had to be temporarily paused after a swathe of his loyal supporters stormed Capitol Hill, killing four people and leaving many injured.
Before being shut down by Twitter and Facebook, Mr Trump made a shocking post calling the Capitol mob “great patriots.” The tweet also read: “these are the things and events that happen when a sacred landslide victory is so unceremoniously and viciously stripped away.”
UK Home Secretary Priti Patel described the events as “awful beyond words” and deplored the current US President for not condemning the violent behaviour.
Meanwhile, Prime Minister Boris Johnson said the scenes unfolding on Capitol Hill were “disgraceful” and urged Mr Trump to commit to a “peaceful and orderly transfer of power”.
It took more than two hours, and several law agency reinforcements to restore order on the US Capitol, as the police staffing the Congress building were severely outnumbered.
The anarchy that unfolded on Capitol Hill, which many have said was directly incited by Trump prompted several members of his own team to consider invoking the 25th amendment.
Under the 25th amendment, Vice President at the time, Mike Pence and a body established by Congress, or a majority Cabinet would have had the power to remove Donald Trump if they deemed that he was “unable to discharge the powers and duties of his office.”
The events leading up to Joe Biden’s inauguration created pressure between the British pound and US dollar (GBP/USD) exchange rate. However, the US dollar (USD) is currently being supported by Biden’s sizable fiscal stimulus package and the ongoing global rollout of COVID-19 vaccines.
Pound Sterling exchange rates to find support in long-term
Whilst the British pound (GBP) is likely to endure some near-term pain due to the UK’s third COVID-19 lockdown, the general consensus is that a sharp recovery will be experienced during Q2, supported by the country’s rapid vaccination programme and reopening of the economy.
The British pound (GBP) reached record highs against the US dollar (USD) two weeks ago, hitting the USD 1.41 mark before slipping during the last trading week. During today’s session, the British pound to US dollar (GBP/USD) exchange rate has fallen to USD 1.39, though economists are confident that the currency pairing can reclimb to record levels in the near future.
It was predicted last year that the British pound to euro (GBP/EUR) exchange rate would face a more challenging 2021 due to Brexit induced cross-border trade disruptions, as well as COVID-19 concerns.
However, the British pound to euro (GBP/EUR) exchange rate has performed much better than previously anticipated, with the currency pairing edging higher during today session at EUR 1.17.
George Vessey Currency Strategist at Western Union noted, “last week, the British Pound suffered its worst week against the US Dollar this year as the world’s reserve currency gained momentum across the board. Sterling could fall further against the dollar but may climb higher against the euro in the short term.”
Given the recent comments from Bank of England (BoE) Governor, Andrew Bailey, that the UK’s economic outlook is largely positive, the British pound (GBP) looks to be positioned for further gains against its key currency rivals in due course.