FOREX-Dollar pares losses as Senate's McConnell vague on further stimulus

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds quotes, McConnell comments on stimulus, updates prices)
By Karen Brettell
NEW YORK, Dec 29 (Reuters) - The dollar pared losses on
Tuesday after earlier reaching a more than two-year low against
the euro, but remained lower on the day as investors weighed
whether an increase in U.S. fiscal stimulus is likely.
U.S. Senate Majority Leader Mitch McConnell on Tuesday
blocked immediate consideration of a measure to increase
COVID-19 relief payments to $2,000. He suggested the Senate
would at least examine the issue. “This just really delays the inevitable,” said Edward Moya,
senior market analyst at OANDA in New York.
“With the Biden administration coming into place you're
going to have expectations that we're going to see another
attempt at more stimulus, and that's why I think the dollar
trimmed its losses but very limitedly,” Moya said.
The dollar fell 0.28% against a basket of currencies =USD
to 89.99. It is holding just above a two-and-a-half year low of
89.72 reached on Dec. 17.
Trading is thin with many investors out between the
Christmas and New Year holidays.
The euro EUR=EBS gained 0.28% to $1.2251 after getting as
high as $1.2274, the strongest since April 2018.
The Aussie AUD=D3 gained 0.39% to $0.7610. It reached
$0.7639 on Dec. 17, the highest since June 2018.
The greenback slipped 0.29% against the Canadian dollar
CAD=D3 to 1.2810 Canadian dollars. The loonie reached 1.2684
on Dec. 17, the strongest since April 2018.
Investors are betting the greenback will continue to decline
- it is down 6.77% this year - on expectations the Federal
Reserve will hold interest rates near zero and the U.S. economy
will struggle to recover from coronavirus-related shutdowns.
Data released by the Commodity Futures Trading Commission on
Monday showed traders increased bets against the dollar in the
week ended Dec. 21 to $26.6 billion. That was the highest in
three months, according to Reuters calculations. A key factor on how much more stimulus is forthcoming will
also be two Georgia Senate runoffs next month that will
determine which party controls the upper U.S. chamber.
“I think consensus is that Republicans will win one of those
seats,” said Moya. However, “the Democrats might have a
one-in-three chance of pulling this off and that is not
reflected in prices right now.”
The euro was also buoyed on Tuesday by a trade deal reached
last week for Britain to leave the European Union. Though the
agreement is not comprehensive, it avoided a damaging no-deal
outcome. Sterling rose 0.33% to $1.3500 GBP=D4 following a two-day
dip. It was as high as $1.3625 this month, a level unseen since
May 2018, but investors have taken some profits since the Brexit
trade deal was struck.
Bitcoin < BTC=BTSP> fell 0.61% to $26,871 after hitting a
record $28,378 on Sunday. The currency has surged 275% this year
as it gains more acceptance from mainstream investors.
XRP XRP=BTSP the third-biggest digital currency, slumped
13% after Coinbase, a major U.S. virtual coin exchange, said it
would suspend XRP trading. The move came after U.S. regulators charged Ripple, a
blockchain firm associated with XRP, with conducting a $1.3
billion unregistered securities offering. Ripple has denied the
charges. Currency bid prices at 3:19PM (2019 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 89.9890 90.2430 -0.28% +0.00% +90.2530 +89.8510
Euro/Dollar EUR=EBS $1.2251 $1.2216 +0.28% +9.27% +$1.2275 +$1.2207
Dollar/Yen JPY=D3 103.5100 103.8250 -0.33% -4.72% +103.8000 +103.4850
Euro/Yen EURJPY= 126.85 126.77 +0.06% +4.02% +127.2300 +126.7100
Dollar/Swiss CHF=EBS 0.8845 0.8886 -0.46% -8.59% +0.8887 +0.8831
Sterling/Dollar GBP=D3 $1.3500 $1.3460 +0.33% +1.82% +$1.3521 +$1.3443
Dollar/Canadian CAD=D3 1.2810 1.2849 -0.29% -1.38% +1.2849 +1.2780
Aussie/Dollar AUD=D3 $0.7610 $0.7583 +0.39% +8.49% +$0.7625 +$0.7577
Euro/Swiss EURCHF= 1.0836 1.0852 -0.15% -0.15% +1.0875 +1.0823
Euro/Sterling EURGBP= 0.9074 0.9078 -0.04% +7.33% +0.9094 +0.9057
NZ NZD=D3 $0.7148 $0.7103 +0.65% +6.24% +$0.7164 +$0.7099
Dollar/Dollar
Dollar/Norway NOK=D3 8.6110 8.6490 -0.40% -1.80% +8.6405 +8.5860
Euro/Norway EURNOK= 10.5510 10.5470 +0.04% +7.25% +10.5815 +10.4950
Dollar/Sweden SEK= 8.1980 8.2569 -0.49% -12.30% +8.2842 +8.1795
Euro/Sweden EURSEK= 10.0498 10.0990 -0.49% -4.01% +10.1328 +10.0403