* Sterling hovers near $1.33 as no-deal risks grow
* Iron ore surge sends AUD above $0.75
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Dec 11 (Reuters) - Sterling was set to snap five
weeks of gains with a slump on Friday, as leaders on both sides
of Brexit trade talks sounded doubtful about finding a
resolution, while the Australian dollar soared along with iron
ore prices to hit a 2-1/2 year high.
The greenback was pinned near a two-and-a-half year low,
with markets heavily short dollars as investors bet on better
returns in other currencies as the pandemic recovery takes hold.
The euro EUR= rose to $1.2158 even after the European
Central Bank expanded its bond buying scheme, given the move was
widely expected. The central bank also lifted growth forecasts
but lowered inflation projections for 2022.
Against a basket of currencies =USD the dollar drifted
lower to 90.662, which is barely a third of one percent above
last week's 31-month trough.
Moves in morning trade were modest, but enough to push the
Australian and New Zealand dollars to new multi-year highs and
keep the euro within range of last week's two-and-a-half year
high of $1.2177.
The yen JPY= rose 0.3% to 103.04 per dollar and the New
Zealand dollar NZD=D3 rose 0.1% to $0.7104.
The Australian dollar AUD=D3 has broken past 75 U.S. cents
for the first time since mid-2018 overnight as prices surged for
Australia's biggest export commodity, iron ore. AUD/ IRONORE/
It last traded at $0.7547 and is set for a sixth consecutive
weekly rise. Over that time, it has gained five cents, or 7%
against the dollar.
The Australian dollar also hit a one-and-a-half year high of
78.58 yen AUDJPY= and a six-month peak of A$1.6083 per euro
EURAUD= overnight and even leapt against the yuan AUDCNH=
despite worsening trade tensions between China and Australia.
"With the iron ore price on a bull run, the Aussie is
largely ignoring 'bad' news," said Commonwealth Bank of
Australia currency analyst Joe Capurso.
FINAL COUNTDOWN
Investors have until the weekend to make last-minute
adjustments to their sterling positions as Brexit trade talks
enter their final lap. GBP/
The pound GBP= slipped 0.8% overnight after British Prime
Minister Boris Johnson said on Thursday there was "a strong
possibility" Britain and the European Union would fail to strike
a deal and it changed hands at $1.3306 in Asian morning trade.
The British pound has shed 1% so far this week as efforts to
seal a trade deal with the EU before protections on some $1
trillion in annual trade expire at the end of the month have
yielded little thus far.
Johnson and European Commission President Ursula von der
Leyen, who has said talks are "difficult," have set Sunday as
the deadline for finding a way forward. Sterling volatility gauges are soaring as markets expect a
wild ride to the finish line.
One-week volatility GBPSWO= is at a new eight-month high
and the premium of puts to calls GBP1MRR= is near its highest
since April as investors pay up for downside protection.
"There has been a greater tendency for more jittery sterling
longs to hit the sell button, although (the) market view remains
that a deal is slightly more likely than not," said Stephen
Innes, the Bankgkok-based chief strategist at Axi.
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Currency bid prices at 9:35AM in Singapore (0135 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2157 $1.2142 +0.12% +8.44% +1.2160 +1.2140
Dollar/Yen JPY=D3 103.9550 104.1850 -0.24% -4.30% +104.2650 +103.9400
Euro/Yen EURJPY= 126.37 126.51 -0.11% +3.62% +126.6100 +126.2800
Dollar/Swiss CHF=EBS 0.8853 0.8858 -0.02% -8.48% +0.8862 +0.8855
Sterling/Dollar GBP=D3 1.3309 1.3293 +0.12% +0.35% +1.3313 +1.3293
Dollar/Canadian CAD=D3 1.2729 1.2742 -0.10% -2.02% +1.2747 +1.2729
Aussie/Dollar AUD=D3 0.7550 0.7536 +0.19% +7.61% +0.7554 +0.7523
NZ NZD=D3 0.7105 0.7100 +0.08% +5.60% +0.7112 +0.7090
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX