(Adds European PMIs, quote, new milestone)
* Dollar softens against most majors; virus worries lift yen
* China's yuan soars
* Focus turns to Georgia Senate race
* Bitcoin slumps after stellar rally
By Julien Ponthus
LONDON, Jan 4 (Reuters) - The U.S. dollar fell to mid-2018
lows on Monday as bullish sentiment across global markets
prompted investors to buy riskier currencies such as the Chinese
yuan and the euro, despite a resurgent pandemic.
With U.S. interest rates pinned at record lows, massive U.S.
deficits and a belief that rebounding world trade will drive
non-dollar currencies higher, the dollar weakened on the first
day of trading in 2021 after falling nearly 7% last year.
The Chinese currency was the biggest beneficiary of the weak
dollar trade. The yuan rocketed to a two-and-a-half-year
high. CNY/
"The U.S. dollar slipped further through the threshold of
the new year as global risk sentiment stayed buoyant", said
Alvin Tan, an FX strategist at RBC Capital Markets.
The dollar index =USD touched a low of 89.415, a level
last seen in mid-2018, and was down 0.3% at 89.529.
The Chinese yuan CNH=D3 rose to 6.44 yuan per dollar after
Beijing cut the weighting of the U.S. dollar in a key currency
index basket. That could push the yuan's value higher against
its peers this year, analysts said, while Chinese factory
activity continued to accelerate in December.
The euro EUR=EBS , which had dipped on New Year's Eve
profit-taking, rose 0.6% to $1.2294, just short of 2018 highs
with positive economic indicators backing the single currency.
IHS Markit economist Phil Smith said the latest data showed
German manufacturing continued to power on at the end of the
year. "With the rollout of the COVID vaccines, it's hoped that the
pandemic will become less and less of a hindrance to demand and
that investment will continue to recover in the year ahead."
Also, a closely watched gauge of growth in British
manufacturing activity rose to its highest level in three years
as factories rushed to complete work before the end of the
post-Brexit transition period on Dec. 31.
Sterling GBP= abandoned most of its early gains against
the dollar, retreating below $1.37 but close to levels last seen
in early 2018.
The safe-haven yen JPY=EBS rose 0.4% to 102.87 per dollar,
after Japanese Prime Minister Yoshihide Suga said his government
was mulling a state of emergency in Tokyo as coronavirus cases
rise.
Bitcoin BTC=BTSP had a rough ride, falling as low as
$27,734 at one point, after making dramatic gains over the new
year's break. It was last down 6.4% at $30.980.
The world's most popular cryptocurrency surged over $30,000
for the first time on Saturday, touched a record high of $34,800
a day later, as investors continued to bet the digital currency
was on its way to becoming a mainstream asset.
========================================================
Currency bid prices at 12:08PM in London (01208 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2291 $1.2218 +0.61% +0.61% +1.2301 +1.2211
Dollar/Yen JPY=D3 102.8950 103.2900 -0.46% -0.47% +103.3100 +102.7300
Euro/Yen EURJPY= 126.47 126.15 +0.25% -0.35% +126.5200 +126.1100
Dollar/Swiss CHF=EBS 0.8798 0.8847 -0.54% -0.54% +0.8845 +0.8789
Sterling/Dollar GBP=D3 1.3647 1.3662 -0.10% -0.10% +1.3703 +1.3645
Dollar/Canadian CAD=D3 1.2694 1.2734 -0.43% -0.31% +1.2735 +1.2666
Aussie/Dollar AUD=D3 0.7719 0.7693 +0.34% +0.34% +0.7740 +0.7682
NZ NZD=D3 0.7208 0.7181 +0.40% +0.40% +0.7230 +0.7183
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
china yuan 2 year https://tmsnrt.rs/388Mrsi
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>