FOREX-Euro holds firm as U.S. stimulus hopes weigh on dollar

* Euro remains near highest since April 2018
* Sterling pause after Monday jump, all eyes on Brexit talks
* Aussie slips after reaching more than 2-year high
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tommy Wilkes
LONDON, Dec 15 (Reuters) - The euro held ground on Tuesday,
hovering near a 2-1/2 year peak as investors looked past new
restrictions to fight COVID-19 and focused on the likelihood of
more U.S. stimulus that would weigh on the dollar.
The single currency has rocketed 4% since early November to
its highest level since April 2018, in part because of
broad-based selling of the U.S. dollar and as investors bet a
vast European recovery fund package will lift the regions'
economies.
Commerzbank analyst Esther Reichelt said that new
restrictions in Germany to address the spread of COVID-19,
rather than weigh on the euro were actually boosting its allure
versus the dollar.
"A strict lockdown in Germany and the resulting economic
effects are further going to support all those who do not expect
inflation to pick up in the euro zone in the foreseeable future.
And that is exactly what is supporting the euro," she said.
The euro was last at $1.2135 EUR=EBS , little changed on
the day.
The dollar index, which measures the greenback against a
basket of currencies, rose slightly to 90.802 =USD .
On Monday the dollar sunk as low as 90.419, a level unseen
since April 2018.
The dollar has been weakened by hopes that U.S. lawmakers
can agree $1.4 trillion in spending.
A $908 billion bipartisan COVID-19 relief plan will be split
into two packages, a person briefed on the matter said, raising
hopes that at least a large part of the plan that already has
bipartisan support will be approved. Elsewhere, sterling's Monday surge -- triggered by news
Britain and the European Union would keep on talking to try and
seal a Brexit trade deal -- fizzled and the pound was last down
0.3% at $1.3290 GBP=D3 .
The Aussie slipped 0.1% to $0.7512 AUD=D3 after touching
the highest since June 2018 at $0.7578 on Monday.
"The big picture is that 2021 looks increasingly promising
for global growth, and while the U.S. will certainly be a part
of that, the global reflation trade is going to support the
risk-sensitive currencies like the Australian dollar," said
Westpac currency analyst Sean Callow.
"The dollar is likely to be in the group of laggards, along
with the likes of the yen."

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Euro during the coronavirus crisis https://tmsnrt.rs/3aaPsK2
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