FOREX-Euro rises to highest in more than two years as optimism builds

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

By Saikat Chatterjee
LONDON, Dec 16 (Reuters) - Strong euro zone survey figures
and hopes of progress on Brexit negotiations pushed the euro
above $1.22 against the U.S. dollar on Wednesday for the first
time since April 2018.
The euro has risen nearly 13% since the European Union
announced a recovery fund in May. Stronger economic activity
data in recent months have also boosted bets that Europe is
likely to outperform the United States in the coming months.
Those expectations got a further boost with manufacturing
survey data from Germany and France indicating that Europe's
biggest economies may be recovering quickly. and
Against the U.S. dollar, the euro EUR=EBS rose 0.4% to
$1.22065, putting it on track for its biggest annual rise since
2017.
"European PMIs, Brexit and a likely dovish Fed are boosting
risk appetite in the currency markets," said Kenneth Broux, a
strategist at Societe Generale in London.
Ursula von der Leyen, the president of the European
Commission, said she could not say whether the EU and Britain
would reach a trade agreement, but progress had been made and
the next few days would be critical. Investors are also keeping an eye on the outcome of a
two-day Federal Reserve policy meeting on Wednesday.
Policymakers are expected to keep the U.S. overnight interest
rate near zero and signal it will stay there for years to come,
a decision that analysts say will further boost risk sentiment.
"There's a feel-good momentum in the market," said Bart
Wakabayashi, Tokyo branch manager of State Street Bank in Tokyo.
The dollar index, which measures the U.S. currency against a
basket of currencies, was last at 90.127 =USD , a level not
seen since April 2018.
Elsewhere, comments by Swedish central bank deputy governor
Jansson that a rapid and significant strengthening of the
Swedish crown EURSEK= would lead to problems for the central
bank in reaching its inflation target failed to stop the crown's
march to 32 month highs.
The Australian dollar was little changed at 75.75 U.S. cents
AUD=D4, nearing a two-and-a-half-year high of 75.780 it reached
on Monday.

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