* Dollar falls to fresh lows on most majors
* Euro, yen rise past major resistance
* Democrats seen winning control of U.S. Congress
By Tom Westbrook and Scott Murdoch
SINGAPORE/HONG KONG, Jan 6 (Reuters) - The U.S. dollar
slipped on Wednesday as Democrats took the lead in runoff votes
that will determine control of the U.S. Senate and possibly pave
the way for a big spending administration under President-elect
Joe Biden.
The euro EUR= rose past major resistance to a new 32-month
high and the greenback struck multi-year lows on the Swiss franc
and the Australian and New Zealand dollars. Against a basket of
currencies, it hit its lowest since April 2018.
Analysts generally assume 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.
MKTS/GLOB
"A Democratic-led government is expected to add more
stimulus to help mitigate the virus crisis and...that means that
there's going to be a weaker dollar," said Paul Sandhu, head of
multi-asset quant solutions at BNP Paribas in Hong Kong.
The boost to the economy also makes investors more
comfortable with risk and likely to seek assets outside the
U.S., especially in emerging markets, Sandhu said.
Democrats will control both houses of Congress if they win
both Senate seats up for contest in Georgia. NBC television and election analytics firm Edison Research
called one of the contests in favour of Democrat Raphael Warnock
and Edison had Democrat Jon Ossoff leading in the other, but the
latter race was still too close to call.
The euro rose 0.3% to $1.2335 in late Asia trade as the
results became clearer, breaking past resistance at $1.2310. The
Australian and New Zealand dollars each rose 0.5%, with the
Aussie AUD=D3 hitting $0.7798 and the kiwi NZD=D3 $0.7289.
The dollar had on Tuesday fallen through a major support
level against the yen JPY= and it extended lower to a new
10-month low of 102.60 in early Asia trade on Wednesday. It also
hit an almost six-year trough of 0.8767 Swiss francs CHF=EBS .
Against a basket of currencies =USD , the dollar fell 0.3%
to 89.272. Sterling GBP= rose 0.2% to $1.3653. GBP/
GEORGIA MORNING DUE
A decisive outcome in Georgia could arrive as soon as
Wednesday morning in the United States, although the tightness
of the count suggests an official result may take longer.
Georgia Secretary of State Brad Raffensperger told CNN that
he hoped to have a better idea around noon (1700 GMT). In any
case the bond market is priced for more borrowing with benchmark
10-year Treasury yields above 1% for the first time since March.
The more modest moves in currencies reflect ambivalence over
whether returns from higher yields will be eventually eroded by
higher inflation or flattered by lower inflation.
"Rising taxes and regulation will not cure today's weak
dollar," said Michael J. Kelly, PineBridge Investments' global
head of multi assets in New York.
"The global rotation out of U.S.-based assets into Europe
and emerging would continue...soon we'll be back to focusing on
the vaccine roll outs."
Rising currencies in Asia, where the economic recovery has
been most impressive, have caught an added boost from China's
soaring yuan, which increases China's purchasing power for
commodities and other imports.
After a Tuesday surge, the yuan CNY= was steady at 6.4552
per dollar on Wednesday as profit taking and state-owned bank
selling cooled excitement about a big jump in its onshore
trading band. CNY/
The yuan has gained 12% on the dollar since last May as
China's economic rebound has led the world's pandemic recovery.
Elsewhere, a rise in oil prices lifted exporters'
currencies, sending the Norwegian crown NOK= to a 21-month
high of 8.4350 per dollar and the Canadian dollar CAD= to a
32-month peak. O/R
Cryptocurrency Bitcoin BTC=BTSP hit a fresh record high of
$35,879 following a bullish price forecast by J.P. Morgan.
Currency bid prices at 3:52PM in Singapore (0752 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2342 $1.2298 +0.35% +1.01% +1.2346 +1.2276
Dollar/Yen JPY=D3 102.7300 102.7400 -0.03% -0.56% +102.8650 +102.6100
Euro/Yen EURJPY= 126.77 126.30 +0.37% -0.12% +126.8000 +126.1500
Dollar/Swiss CHF=EBS 0.8763 0.8783 -0.21% -0.93% +0.8798 +0.8761
Sterling/Dollar GBP=D3 1.3652 1.3623 +0.21% -0.07% +1.3658 +1.3592
Dollar/Canadian CAD=D3 1.2648 1.2668 -0.17% -0.68% +1.2695 +1.2647
Aussie/Dollar AUD=D3 0.7798 0.7760 +0.49% +1.37% +0.7799 +0.7734
NZ NZD=D3 0.7293 0.7251 +0.54% +1.52% +0.7294 +0.7237
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX