FOREX-Dollar bounces off March 2018 low as Georgia elections wind down

* Dollar index hits lowest since March 2018
* Euro hits new 2018 high versus dollar
* Bitcoin trades above $35,000
* Graphic: World FX rates in 2021 https://tmsnrt.rs/2RBWI5E

(Adds details, updates prices; changes byline, previous LONDON)
By Chuck Mikolajczak
NEW YORK, Jan 6 (Reuters) - The dollar bounced after sinking
to its lowest level in nearly three years on Wednesday, with
markets anticipating a Democrat win in the U.S. Senate election
in Georgia that would clear the path for a larger fiscal
stimulus package.
Democrats won one U.S. Senate race in Georgia and led in
another on Wednesday, moving closer to a sweep in a deep South
state that would give them control of Congress and the power to
advance President-elect Joe Biden's policy goals.
Analysts generally expect a Democrat-controlled Senate would
be positive for economic growth globally and thus for most
riskier assets, but negative for bonds and the dollar as the
U.S. budget and trade deficits swell even further. As markets priced in the Democrats winning both seats, the
dollar index =USD hit its lowest since March 2018 at 89.206,
but was last up 0.294% at 89.726.
Fueling expectations of further stimulus measures was a weak
report on the labor market in the form of the ADP National
Employment Report, which showed private payrolls post their
first decline in eight months as coronavirus cases surge.

The dollar also fell to its lowest in six years versus the
Swiss franc at 0.87585 CHF=EBS .
After a fall of nearly 7% in 2020 and dropping as much as
0.9% in the new year, the dollar turned higher as a crowded
trade began to unwind. Analysts still expect the longer-term
trend for the greenback to be weaker, however.
"Obviously you are going to have to take a little bit of a
breather every now and then but we are six days into the new
year and the dollar is down roughly half a percent to one
percent against G10 currencies, that is a pretty strong move for
six days," said Minh Trang, senior FX trader at Silicon Valley
Bank in Santa Clara, California.
"The bearish dollar theme is still in play."
The euro EUR=EBS gave up earlier gains and was down 0.15%
to $1.2279, after earlier having risen past major resistance to
as high as $1.2349.
Riskier currencies also surged, with the New Zealand dollar
NZD=D3 and Australian dollar AUD=D3 hitting their highest in
nearly three years and holding onto most of the gains even as
the dollar recovered.
The move was helped by a range of surveys overnight showing
that manufacturing globally had proved resilient in December,
despite rising virus cases.
Elsewhere, U.S. President Donald Trump escalated tensions
with Beijing by signing an executive order banning U.S.
transactions with eight Chinese software applications.
After surging on Monday and Tuesday, the yuan softened,
after China's central bank appeared to signal a preference for a
more moderate pace of intervention. The yuan has gained around 10% on the dollar since last May
as China's economic rebound has led the world's pandemic
recovery CNY=CFXS CNH=EBS .
Bitcoin BTC=BTSP traded above $35,000 for the first time,
rising to $35,879.35 in the Asian session and extending a rally
that has seen it rise more the 800% since mid-March.
These gains eased somewhat, with the cryptocurrency last up
1.68% at $34,610.52.