* Brexit deal imminent, sterling surges
* Dollar dips despite Trump threat over stimulus package
* Euro hits $1.22, Aussie adds 0.7%
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 23 (Reuters) - The dollar slipped on Wednesday, after gaining for three straight
sessions, as risk appetite rose on the expectation of an imminent Brexit trade deal between the UK and the
European Union.
Sterling and the euro took off against the greenback after the Brexit headlines, as did currencies
tied to higher risk appetite such as the Australian, Canadian, and New Zealand dollars.
Britain and the European Union appeared close to clinching a long-elusive trade agreement on
Wednesday. A reporter with Britain's Daily Mail said a deal had already been done, and speculation flew
that British Prime Minister Boris Johnson would make an announcement on Wednesday evening. U.S. Treasury yields rose in the wake of the Brexit news, in line with those in Europe and the UK.
In afternoon trading, the dollar fell 0.1% to 90.39 =USD .
The dollar index has weakened more than 6% this year as investors bet the U.S. Federal Reserve will
keep its monetary policy ultra-accommodative. Expectations for further declines by the dollar are helping
buoy stock markets and emerging-market currencies. "We have a lower uncertainty premium compared to March. The addition of the vaccines...has basically
established what we have known since the summer which is a weaker dollar," said Mazen Issa, senior FX
strategist, at TD Securities in New York.
David Rosenberg, chief economist and strategist at Rosenberg Research in a research note said
technical measures suggested an increasing likelihood of an oversold bounce in the dollar.
"Longer-term, the dollar remains negative — trend, moving averages and intermediate-term momentum all
remain in downtrends," he added.
U.S. data, meanwhile, was mixed on Wednesday but had little currency impact.
Initial jobless claims unexpectedly fell last week, though remained elevated, and a separate report
showed consumer spending fell last month for the first time since April. U.S. new home sales were
disappointing as well. The euro rose 0.2% to $1.2180 EUR=EBS . The single currency earlier this month hit its highest in
more than two-and-a-half years.
Sterling extended gains versus the dollar, rising above $1.35. The pound GBP=D3 which had earlier
firmed on the lifting of a French border blockage, last traded up 0.9% at $1.3482. Against the euro, the
pound jumped 0.8% at 90.33 pence EURGBP=D3 .
The Brexit headlines overshadowed President Donald Trump's threat to veto the U.S. stimulus bill.
Trump said the long-awaited stimulus package should be amended to increase the amount in the stimulus
checks -- potentially disrupting the bill. Elsewhere, the Australian dollar gained 0.7% against the dollar to US$0.7575 AUD=D3 , boosted in part
by signs that a small COVID-19 outbreak in Sydney would be contained. The New Zealand dollar also rose
0.7% to US$0.7091 NZD=D3 .
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Currency bid prices at 3:05PM (2005 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.3980 90.4660 -0.07% +0.00% +90.6710 +90.1510
Euro/Dollar EUR=EBS $1.2180 $1.2162 +0.16% +8.66% +$1.2221 +$1.2155
Dollar/Yen JPY=EBS 103.5900 103.6150 -0.03% -4.69% +103.6450 +103.3550
Euro/Yen EURJPY= 126.16 126.04 +0.10% +3.45% +126.3800 +125.9400
Dollar/Swiss CHF=EBS 0.8890 0.8893 -0.05% -8.15% +0.8911 +0.8870
Sterling/Dollar GBP=D3 $1.3482 $1.3377 +0.78% +1.64% +$1.3569 +$1.3361
Dollar/Canadian CAD=D3 1.2856 1.2908 -0.40% -1.03% +1.2914 +1.2835
Aussie/Dollar AUD=D3 $0.7574 $0.7520 +0.73% +7.96% +$0.7591 +$0.7519
Euro/Swiss EURCHF= 1.0827 1.0818 +0.08% -0.23% +1.0858 +1.0812
Euro/Sterling EURGBP= 0.9031 0.9101 -0.77% +6.83% +0.9109 +0.9003
NZ NZD=D3 $0.7090 $0.7043 +0.67% +5.36% +$0.7103 +$0.7031
Dollar/Dollar
Dollar/Norway NOK=D3 8.6525 8.7390 -1.14% -1.51% +8.7545 +8.6350
Euro/Norway EURNOK= 10.5400 10.6172 -0.73% +7.14% +10.6610 +10.5256
Dollar/Sweden SEK= 8.2955 8.3487 -0.35% -11.26% +8.3529 +8.2781
Euro/Sweden EURSEK= 10.1039 10.1391 -0.35% -3.49% +10.1640 +10.0993
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