Dollar gains in tug-of-war between vaccine, rising virus cases

  • 11/20/2020
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NEW YORK (Reuters) - The dollar on Friday rose against major currencies such as the euro and yen, with traders consolidating positions amid competing forces that pull the currency in different directions: the surge in virus cases, on the one hand, and positive vaccine news, on the other. The possible resumption of U.S. stimulus talks for COVID-19 relief has also weighed on the dollar as a safe haven. Republican and Democratic senators agreed on Thursday to revive those discussions Overall, the greenback ended the week on a loss against a currency basket. The week started off on a negative note for the dollar with positive news on a vaccine for COVID-19, but the market has since moved back and forth between focusing on coronavirus cases and the virus drug. Pfizer Inc PFE.N said it had applied for emergency use authorization in the United States for its COVID-19 vaccine. “We think we are in the early stages of a recovery in the global economy and trade from the shock of the pandemic and this will further” weigh on the dollar and support the euro,” Jonathan Petersen, markets economist, at Capital Economics, said. U.S. Treasury Secretary Steven Mnuchin, meanwhile, defended on Friday his decision to end several of the Federal Reserve’s key pandemic lending programs on Dec. 31, saying Congress should use the money to help small U.S. companies with grants instead. The dollar briefly rose overnight after the Mnuchin news late Thursday. “The request comes as most lending facilities haven’t been tapped for more than the amount committed by the Treasury to backstop the programmes, suggesting market functionality is sufficient to warrant their expiration,” said Monex Europe in a research note. In afternoon trading, the dollar was flat against a currency basket at 92.369 in a quiet day for currency markets. The euro was down 0.1% against the dollar at $1.1859 EUR=EBS, posting a small weekly gain. Action Economics noted some pre-weekend selling in the euro going into the London close. “The lack of progress between the European Union and the U.K. on Brexit trade talks has likely kept a cap on the euro despite generally waning U.S. dollar sentiment,” it said in its daily blog. The Australian dollar - seen as a liquid proxy for risk appetite - posted its best monthly gain versus the U.S. dollar since April. It last traded up 0.4% at US$0.7308 AUD=D3. The New Zealand dollar hit new two-year highs of US$0.6951 NZD=D3, helped by positive risk appetite. It was last up 0.3% at US$0.6938. The U.S. dollar was up 0.1% versus the yen at 103.81 yen JPY=EBS. Elsewhere, Bitcoin BTC=BTSP rose to a three-year high of $18,824 on Friday, getting close to its all-time high of just under $20,000. It was last up 4.6% at $18,646.15. ======================================================== Currency bid prices at 3:32PM (2032 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 92.3680 92.3750 +0.01% +0.00% +92.4360 +92.2010 Euro/Dollar EUR=EBS $1.1859 $1.1873 -0.11% +5.79% +1.1891 +1.1850 Dollar/Yen JPY=D3 103.8150 103.7650 +0.08% -4.39% +103.9050 +103.7500 Euro/Yen EURJPY= 123.11 123.18 -0.06% +0.95% +123.4700 +123.0300 Dollar/Swiss CHF=EBS 0.9113 0.9107 +0.08% -5.81% +0.9123 +0.9093 Sterling/Dollar GBP=D3 1.3286 1.3265 +0.16% +0.17% +1.3297 +1.3249 Dollar/Canadian CAD=D3 1.3090 1.3073 +0.15% +0.78% +1.3096 +1.3039 Aussie/Dollar AUD=D3 0.7306 0.7283 +0.33% +4.13% +0.7324 +0.7267 Euro/Swiss EURCHF= 1.0807 1.0810 -0.03% -0.41% +1.0823 +1.0795 Euro/Sterling EURGBP= 0.8924 0.8955 -0.35% +5.56% +0.8962 +0.8919 NZ NZD=D3 0.6936 0.6922 +0.22% +3.09% +0.6950 +0.6905 Dollar/Dollar Dollar/Norway NOK=D3 9.0015 8.9880 +0.14% +2.61% +9.0470 +8.9700 Euro/Norway EURNOK= 10.6780 10.6890 -0.10% +8.45% +10.7548 +10.6494 Dollar/Sweden SEK= 8.6195 8.5977 +0.19% -7.79% +8.6245 +8.5847 Euro/Sweden EURSEK= 10.2228 10.2035 +0.19% -2.35% +10.2340 +10.2026

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