FOREX-Dollar gets global beating as stimulus, Brexit boost risk appetite

  • 12/17/2020
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(Adds details about Wall Street opening and jobless report. Updates comments and prices.) * * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E By Suzanne Barlyn Dec 17 (Reuters) - The dollar fell to its lowest in more than two years against major currencies on Thursday as U.S. lawmakers wrangled over stimulus details, the Federal Reserve stuck to its current policy guns, and a post-Brexit trade deal boosted appetite for risk. After months of feuding and with a weekend deadline fast approaching, U.S. congressional negotiators were hammering out details of a $900 billion COVID-19 aid bill that leaders have vowed to pass before going home this year. The legislation is expected to include $600 to $700 stimulus checks, extend unemployment benefits, help pay for vaccine distribution and assist struggling small businesses. The dollar index fell as low as 89.767 against a basket currencies, breaking below 90 for the first time since April 2018. "There"s a lot of risk-on factors to chew on," said Toronto-based Erik Bregar, head of FX strategy for the Exchange Bank of Canada, noting U.S. Federal Reserve policy, encouraging Australian economic data, and promising headlines about a possible Brexit trade deal. "All of that is bearish for the dollar," Bregar said. Wall Street"s main indexes opened higher on Thursday on increased optimism over a coronavirus stimulus bill, while an unexpected rise in weekly jobless claims pointed to further economic stress from the COVID-19 pandemic. The Federal Reserve on Wednesday said it would keep funnelling cash into financial markets until the U.S. economic recovery is secure. The promise of long-term help fell short of some investors" hopes of an immediate move. The dollar index rose after the Fed"s announcement, but the respite was short-lived. Meanwhile, European currencies hammered the greenback. Optimism the European Union and the UK will finally reach a post-Brexit trade deal boosted the pound, which rose to $1.3615 , on Thursday, its highest level since May 2018. But it gave back some of the gain and was last up 2.44% at $1.3585. EU Brexit negotiator Michel Barnier on Thursday reported "good progress" in the talks but cautioned "last stumbling blocks" stood in the way of sealing a new trade pact. The Bank of England kept its stimulus programme unchanged as it awaited for the outcome of the Brexit trade talks. The euro was last up 0.234% at $1.2244, its highest since April 2018. The Swiss franc also gained against the dollar and hit a six-year high of $0.8823 Norway"s currency, the crown, also strengthened to a 17-month high against the dollar, up over 1% after the country"s central bank kept its policy interest rate at zero percent but warned that a rate increase may come earlier than it had expected. Also, Bitcoin set yet again a record high on Thursday, rising over $23,000 just a day after passing the $20,000 milestone for the first time. Bitcoin was last at $23,144.51, up 8.13%. ======================================================== Currency bid prices at 9:38AM (1438 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 89.8560 90.2510 -0.43% +0.00% +90.2820 +89.7890 Euro/Dollar $1.2244 $1.2202 +0.34% +9.21% +$1.2259 +$1.2189 Dollar/Yen 103.0000 103.4350 -0.45% -5.20% +103.5550 +102.9650 Euro/Yen 126.09 126.19 -0.08% +3.39% +126.3800 +126.0200 Dollar/Swiss 0.8843 0.8849 -0.05% -8.59% +0.8857 +0.8823 Sterling/Dollar $1.3585 $1.3511 $1.3585 +2.44% +$1.3622 +$1.3499 Dollar/Canadian 1.2707 1.2738 -0.24% -2.18% +1.2750 +1.2698 Aussie/Dollar $0.7621 $0.7579 +0.57% +8.63% +$0.7639 +$0.7568 Euro/Swiss 1.0825 1.0798 +0.25% -0.25% +1.0828 +1.0791 Euro/Sterling 0.9011 0.9029 -0.20% +6.59% +0.9038 +0.8984 NZ $0.7161 $0.7114 +0.65% +6.41% +$0.7171 +$0.7104 Dollar/Dollar Dollar/Norway 8.5875 8.7000 -1.31% -2.12% +8.6680 +8.5710 Euro/Norway 10.5160 10.5850 -0.65% +6.89% +10.5910 +10.4922 Dollar/Sweden 8.2682 8.3533 -0.57% -11.53% +8.3576 +8.2623 Euro/Sweden 10.1238 10.1816 -0.57% -3.30% +10.1965 +10.1210 (Reporting by Suzanne Barlyn; Editing by Angus MacSwan)

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