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FOREX-Dollar plumbs more than two-year lows as more stimulus in view

Published 12/31/2020, 05:00 AM
Updated 12/31/2020, 05:10 AM
© Reuters.
USD/JPY
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USD/SEK
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DX
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* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds Brexit vote, U.S. data, updates prices)
By Karen Brettell
NEW YORK, Dec 30 (Reuters) - The euro, Aussie and New
Zealand dollars all posted more than two-year highs against the
struggling greenback on Wednesday as investors bet on more U.S.
fiscal support and positioned for year-end in light trading
volume.
Investors are betting that an improving economic outlook as
COVID-19 vaccines are rolled out and unprecedented fiscal and
monetary stimulus will boost global growth and asset prices in
2021.
U.S. economic growth is expected to drag behind peers,
however, with the U.S. currency also suffering from rising
fiscal and current account deficits as the government increases
spending to tackle coronavirus-related business shutdowns.
Data on Wednesday showed that the advance goods trade
deficit rose to a record $84.8 billion in November, from $80.3
billion in November.
“The start of COVID-19 immunization campaigns in several
countries as well as additional U.S. fiscal support have reduced
downside risk to the global economy and bode well for general
financial market sentiment. This remains a drag for USD,” Elias
Haddad, senior currency Strategist at Commonwealth Bank of
Australia, said in a report on Wednesday.
The dollar fell 0.39% against a basket of currencies =USD
to 89.65 after earlier dropping to 89.56, the lowest since April
2018. It is down more than 7% this year.
Trading volumes are thin with many investors out between the
Christmas and New Year holidays.
The euro EUR=EBS reached $1.2310, before falling back to
$1.2292, up 0.34% on the day.
The Aussie AUD=D3 surged to $0.7686, and was last up 0.93%
at $0.7676. The kiwi NZD=D3 reached $0.7213, and was last
$0.7200, up 0.74%.
It was the highest level for all three currencies against
the U.S. dollar since April 2018.
The dollar also slipped 0.19% to 103.23 yen JPY= . It is
holding just above a nine-month low of 102.86 yen reached on
Dec. 17.
Optimism of further stimulus came even after Senate Majority
Leader Mitch McConnell on Tuesday put off a vote on increasing
COVID-19 relief checks from $600 to $2,000. U.S. President-elect Joe Biden is expected to push for more
measures to support the U.S. economy after he is inaugurated
next month.
Other data on Wednesday showed that contracts to buy U.S.
previously owned homes fell for a third straight month in
November as an acute shortage of properties pushed up prices.
Sterling also jumped as lawmakers approved Prime Minister
Boris Johnson's post-Brexit trade deal with the European Union.
The pound GBP=D3 gained 0.87% to $1.3618. It is holding
just below the $1.3625 level reached earlier this month, the
highest since May 2018.
Bitcoin BTC=BTSP reached a record high of $28,917, taking
the yearly gain for the world's most popular cryptocurrency past
300% BTC=BTSP . The greenback fell 0.37% against the loonie CAD=D3 to
1.2765 Canadian dollars.

========================================================
Currency bid prices at 3:20PM (2020 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 89.6460 90.0010 -0.39% +0.00% +90.0110 +89.5590
Euro/Dollar EUR=EBS $1.2292 $1.2251 +0.34% +9.65% +$1.2310 +$1.2250
Dollar/Yen JPY=D3 103.2300 103.4850 -0.19% -4.91% +103.5800 +102.9650
Euro/Yen EURJPY= 126.89 126.86 +0.02% +4.05% +127.1300 +126.4700
Dollar/Swiss CHF=EBS 0.8819 0.8841 -0.25% -8.86% +0.8854 +0.8816
Sterling/Dollar GBP=D3 $1.3618 $1.3502 +0.87% +2.68% +$1.3619 +$1.3495
Dollar/Canadian CAD=D3 1.2765 1.2814 -0.37% -1.73% +1.2827 +1.2750
Aussie/Dollar AUD=D3 $0.7676 $0.7606 +0.93% +9.41% +$0.7686 +$0.7604
Euro/Swiss EURCHF= 1.0840 1.0825 +0.14% -0.11% +1.0863 +1.0828
Euro/Sterling EURGBP= 0.9025 0.9069 -0.49% +6.75% +0.9086 +0.9014
NZ NZD=D3 $0.7200 $0.7148 +0.74% +7.01% +$0.7211 +$0.7148
Dollar/Dollar
Dollar/Norway NOK=D3 8.5460 8.6200 -0.75% -2.47% +8.6215 +8.5375
Euro/Norway EURNOK= 10.5061 10.5433 -0.35% +6.79% +10.5787 +10.4904
Dollar/Sweden SEK= 8.1963 8.1937 +0.27% -12.31% +8.2118 +8.1655
Euro/Sweden EURSEK= 10.0734 10.0462 +0.27% -3.78% +10.0844 +10.0221

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