FOREX-Dollar up as risk sentiment sours, sterling dips on Brexit fears

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

(Adds quotes, U.S. data, details on Brexit talks, updates
prices)
By Karen Brettell
NEW YORK, Dec 11 (Reuters) - The greenback bounced on safe
haven buying on Friday as risk appetite fell due to concerns
over delayed U.S. fiscal stimulus amid a surge in COVID-19 cases
and the increasing likelihood that Britain will exit the
European Union without a deal.
U.S. officials prepared on Friday for the most ambitious
vaccination campaign in decades as regulators rapidly advanced
toward approving the first COVID-19 vaccine to slow a pandemic
now killing 3,000 Americans per day.
But talks on a federal COVID-19 relief package have not yet
been fruitful, and House Speaker Nancy Pelosi on Thursday raised
the possibility of negotiations dragging on through Christmas.
“This has been a disappointing week on many fronts,” said
Edward Moya, senior market analyst at OANDA in New York.
“There's been no progress on COVID aid relief talks in DC,
we have Brexit, which is once again going to go down to the
wire, and coronavirus deaths and hospitalizations are still at a
staggering pace in the U.S. and it's likely to lead to more
restrictive measures and lockdowns,” Moya said.
The dollar index against a basket of major currencies =USD
gained 0.23% to 90.955. It is trading just above a
two-and-a-half-year low of 90.471 reached on Dec. 4.
Analysts are overwhelmingly calling for further U.S. dollar
weakness as global growth picks up and with the U.S. Federal
Reserve expected to hold rates near zero for years to come.
A risk to this view, however, will be if the U.S. economy
surprises market participants by outperforming, analysts at Bank
of America said on Friday in a report.
“A much stronger US recovery than in most of the rest of the
world, particularly Europe, could be risk-off and USD positive
by re-pricing the Fed,” they said.
Data on Friday showed that U.S. producer prices barely rose
in November, supporting views that inflation would remain benign
in the near term, while other data showed a surprise improvement
in consumer sentiment early in December. Sterling dipped 0.50% to $1.3223 and bets on further
volatility in the currency grew as a disorderly Brexit appeared
more likely. Britain is likely to leave the European Union in three weeks
without a trade deal, British Prime Minister Boris Johnson and
European Commission chief Ursula von der Leyen said on Friday.
Johnson and von der Leyen have given negotiators until
Sunday evening to break a deadlock over fishing rights and EU
demands for Britain to face consequences if in the future it
diverges from the bloc's rules. Options market moves show traders bracing for chaos, with
one-week implied volatility GBPSWO= at a nine-month high and
the premium of sterling puts to calls GBP1MRR= near its
highest since April as investors pay for downside protection.
The euro EUR= also retreated against the dollar, losing
0.23% to $1.2115 after Thursday's gains, when the European
Central Bank announced a new round of stimulus in line with
market expectations. EU leaders also reached a compromise over a
pandemic aid package. ========================================================
Currency bid prices at 3:00PM (2000 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD $90.9550 90.7630 +0.23% +0.00% +91.0480 +90.6130
Euro/Dollar EUR=EBS $1.2115 $1.2142 -0.23% +8.05% +1.2163 +1.2106
Dollar/Yen JPY=D3 104.0050 104.1850 -0.23% -4.30% +104.2650 +103.8300
Euro/Yen EURJPY= 125.99 126.51 -0.41% +3.32% +126.6100 +125.7900
Dollar/Swiss CHF=EBS 0.8895 0.8858 +0.42% -8.07% +0.8909 +0.8854
Sterling/Dollar GBP=D3 1.3223 1.3293 -0.50% -0.28% +1.3323 +1.3135
Dollar/Canadian CAD=D3 1.2770 1.2742 +0.24% -1.69% +1.2792 +1.2721
Aussie/Dollar AUD=D3 0.7536 0.7536 +0.01% +7.41% +0.7572 +0.7520
Euro/Swiss EURCHF= 1.0776 1.0755 +0.20% -0.70% +1.0789 +1.0750
Euro/Sterling EURGBP= 0.9159 0.9129 +0.33% +8.34% +0.9229 +0.9116
NZ NZD=D3 0.7083 0.7100 -0.21% +5.29% +0.7112 +0.7074
Dollar/Dollar
Dollar/Norway NOK=D3 8.8105 8.7540 +0.67% +0.47% +8.8680 +8.7495
Euro/Norway EURNOK= 10.6678 10.6518 +0.15% +8.52% +10.7485 +10.6245
Dollar/Sweden SEK= 8.4605 8.4428 +0.01% -9.49% +8.4896 +8.4212
Euro/Sweden EURSEK= 10.2502 10.2495 +0.01% -2.09% +10.2860 +10.2385