FOREX-Dollar hits two-year lows as traders ignore U.S. stimulus delays

* Dollar falls to lowest since April 2018
* Pound boosted by UK Oxford/AstraZeneca vaccine approval
* Aussie, Kiwi gain versus dollar
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

LONDON, Dec 30 (Reuters) - The dollar sunk to its lowest in
more than two years in Asian trading on Wednesday and riskier
currencies surged, as investors looked past the latest delay in
U.S. fiscal stimulus and bet that global market risk appetite
would increase in 2021.
U.S. Senate Majority Leader Mitch McConnell on Tuesday
blocked a vote on increasing COVID-19 relief payments to $2,000,
adding another delay to fractious negotiations over fiscal
stimulus. But market sentiment was upbeat as investors remained
optimistic that a fiscal stimulus deal will be eventually
reached, lessening demand for the safe-haven dollar.
The latest setback "doesn't really matter too much for
investors as they have been over the moon on the back of news
that there is still plenty of fiscal support for the U.S.
economy," Naeem Aslam, chief market analyst at Avatrade, said in
a note.
Analysts expect the dollar to weaken further in 2021 as U.S.
President-elect Joe Biden is expected to push for even more
measures to support the U.S. economy.
The "risk-on" moves in currency markets peaked in the Asian
session on Wednesday, then eased off as European markets opened.
At 0816 GMT, the dollar was down around 0.1% versus a basket
of currencies, at 89.895, having dropped as low as 89.711
overnight =USD . The euro was up at $1.226 EUR=EBS .
The Australian dollar - seen as a liquid proxy for global
risk appetite - was up 0.6% on the day at 0.76475 at 0825 GMT
AUD=D3 . The New Zealand dollar also hit two-year highs
NZD=D3 .
The dollar lost out to the Japanese yen, with dollar-yen
down 0.2% at 103.34 at 0834 GMT JPY=EBS .
In Europe, sentiment was buoyed by Britain becoming the
first country in the world to approve the COVID-19 vaccine
developed by AstraZeneca and Oxford University.
The British pound was up against the dollar, at $1.3538, but
little changed against the euro, as traders returning from the
Christmas break digested the Brexit deal struck on Dec. 24.
Although the agreement avoids a chaotic no-deal exit, it
does not cover services, which make up 80% of the British
economy. Commonwealth Bank of Australia senior currency strategist
Elias Haddad wrote in a note to clients that the fact that the
deal does not provide an equivalence framework for financial
service and growing support for Scottish independence are new
headwinds for the pound.
Euro zone government bond yields edged up by around one
basis point, with Germany's benchmark 10-year yield at -0.56% at
0827 GMT DE10YT=RR .
Elsewhere, Bitcoin reached a record high of $28,599.99,
taking its yearly gain for the world's most popular
cryptocurrency past 295% BTC=BTSP .

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Dollar index in 2020 https://tmsnrt.rs/38KGAZx
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