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As per the latest estimates from the US Congressional Budget Office (CBO), published during the early Thursday morning in Asia, the federal budget deficit in June 2020 was $863 billion, compared with a deficit of $8 billion in the same month last year.

The report also says that the increase stems from the economic disruption caused by the 2020 coronavirus (COVID-19) pandemic and from the federal government’s response to it, including actions by the Administration and the enactment of four pieces of legislation.

It was additionally mentioned that the federal budget deficit was $2.7 trillion in the first nine months of the fiscal year 2020, CBO estimates, a $2.0 trillion more than the deficit recorded during the same period last year. “Revenues were 13 percent lower and outlays were 49 percent higher through June 2020 than during the same nine-month period in the fiscal year 2019,” as per the update.

The CBO estimates that receipts in June totaled $242 billion—$92 billion (or 28 percent) less than those in June 2019.

FX implications

The news becomes a US dollar negative announcement and could exert additional downside pressure on the greenback. That said, the US dollar index (DXY) dropped to the lowest since June 23 while taking rounds to 96.50 by the press time.