March 28, 2024

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Business is my step

FOREX-Dollar languishes amid pandemic aid optimism, pound meanders

2 min read

By Kevin Buckland

TOKYO, Dec 29 (Reuters)The dollar languished near a 2-1/2-year low on Tuesday with demand for safe-havens flagging as U.S. lawmakers pushed forward with a COVID-19 relief package.

The House of Representatives voted on Monday to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote.

Last week’s Brexit agreement, while bare bones, also supported the outlook for global growth, lifting Asian stocks on Tuesday following Wall Street gains.

“Optimism abounds, and it’s generally coming from equity markets,” said Bart Wakabayashi, Tokyo Branch manager of State Street Bank and Trust.

“The dollar is very heavy, and that will continue into next year.”

The dollar index was little changed at 90.194 =USD in holiday-thinned trading, hovering near the 89.723 level reached on Dec. 17 for the first time since April 2018.

Short positions on the dollar swelled in the week ended Dec. 21 to $26.6 billion, the highest in three months, according to Reuters’ calculations based on data released by the Commodity Futures Trading Commission on Monday.

The euro rose 0.1% to $1.22260 EUR=EBS early in the Asian session, hovering near the 2-1/2-year high of 1.22735 touched earlier this month.

The dollar bought 103.740 yen JPY=EBS, another haven asset.

Sterling rose 0.1% to $1.3477 GBP= following a two-day decline. It was as high as $1.3625 this month, a level not seen since May 2018.

Investors have taken profits in the UK currency following the confirmation last week of a Brexit trade deal that was widely expected.

While the agreement came as a relief to investors, the pact leaves Britain far more detached from the EU, analysts say.

“People are still trying to figure out what this Brexit agreement means,” weighing on the pound, said State Street’s Wakabayashi.

“Nothing has really been agreed on financial markets, and that’s a big negative for the UK.”

Bitcoin slipped 0.8% to $26,841 BTC=BTSP, continuing its retreat from the all-time high of $28,377.94 set Sunday.

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Currency bid prices at 11:24AM (224 GMT)

Description

RIC

Last

U.S. Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

Euro/Dollar

EUR=EBS

$1.2234

$1.2216

+0.15%

+9.13%

+1.2237

+1.2207

Dollar/Yen

JPY=D3

103.7520

103.8250

-0.07%

-4.48%

+103.7920

+103.7300

Euro/Yen

EURJPY=

126.98

126.77

+0.17%

+4.12%

+126.9800

+126.7100

Dollar/Swiss

CHF=EBS

0.8876

0.8886

-0.06%

-8.22%

+0.8887

+0.8876

Sterling/Dollar

GBP=D3

1.3469

1.3460

+0.09%

+1.58%

+1.3482

+1.3443

Dollar/Canadian

CAD=D3

1.2832

1.2849

-0.08%

-1.17%

+1.2848

+1.2835

Aussie/Dollar

AUD=D3

0.7590

0.7583

+0.15%

+8.22%

+0.7595

+0.7577

NZ Dollar/Dollar

NZD=D3

0.7117

0.7103

+0.21%

+5.78%

+0.7118

+0.7099

All spots FX=

Tokyo spots AFX=

Europe spots EFX=

Volatilities FXVOL=

Tokyo Forex market info from BOJ TKYFX

(Reporting by Kevin Buckland; Editing by Sam Holmes)

(([email protected];))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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