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FOREX-Dollar consolidates losses after week-long drubbing

Published 18/12/2020, 11:07
© Reuters.
DX
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* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Iain Withers
LONDON, Dec 18 (Reuters) - The dollar consolidated losses on
Friday after a week of declines that pushed it to its lowest in
two and a half years, as its slide sucked in more short sellers
looking to make an easy buck.
The dollar index recovered on the day and was last up 0.2%
=USD just short of 90, but remained on track for a fall of 1%
over the week. It had reached its lowest in more than two years
at 89.723 on Thursday.
Policy updates from central banks in the United States,
Japan, Britain, Switzerland and Norway this week should do
little to upend recent currency market trends and the long-term
weakening of the U.S. dollar, analysts predicted.
"The announcements this week certainly reinforce the
prospects of loose monetary conditions and favourable risk asset
performance, which led by the Fed will keep the U.S. dollar on a
weakening path," analysts at MUFG said in a note.
The Bank of Japan announced on Friday an extension of its
COVID-19 loan programmes by six months and a surprise review of
its policy to consider "further effective and substantive
monetary easing", to conclude by March 2021. The dollar rebounded as much as half a percent against the
yen to 103.595 yen but remains 0.5% down versus the Japanese
currency for the week.
The pound reversed some of its gains against the dollar and
euro as knife-edge talks over a Brexit trade deal between the UK
and European Union continued. GBP=D3 EURGBP=D3 EU Brexit negotiator Michel Barnier said on Friday that
"just a few hours" remained for negotiations to reach a trade
deal with Britain, with the path to any deal "very narrow".
Bitcoin BTC=BTSP traded around $23,000, after rocketing to
its highest-ever level on Thursday.

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