* Dollar bid higher after recent weakness
* Pound off lows as investors await Brexit talks
* Euro strength problematic for ECB -analyst
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds analyst comments, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 8 (Reuters) - The dollar edged higher on Tuesday in choppy trading, taking a breather
from a sell-off that took it to its lowest level in more than 2-1/2 years last week, while sterling
slipped as investors awaited the outcome of Brexit trade-deal talks.
An index tracking the dollar's value =USD rose 0.1% to 90.95. So far this year, the dollar was down
nearly 6%, on pace for its weakest yearly performance since 2017.
"The monetary and fiscal stimuli we're seeing is going to reflate the world and that leads to a weaker
dollar and should be good for risk and emerging market currencies," said Axel Merk, president and chief
investment officer at Merk Investments, which oversees $1 billion in assets.
Positive vaccine news from Johnson and Johnson JNJ.N and Pfizer Inc PFE.N on Tuesday supported
equities and lifted risk appetite, but the dollar held its own. .N
Upbeat economic sentiment data from Germany lifted the euro earlier in the session, but it was last
flat to slightly lower at $1.2104 EUR=EBS .
German investor sentiment soared more than expected in December on expectations that vaccines against
the coronavirus would boost the outlook for Europe's largest economy.
The ZEW economic research institute said its survey of investors' economic sentiment moved up to 55.0
from 39.0 in the previous month. A Reuters poll had forecast a reading of 45.5. So far this year, the euro has gained roughly 8% versus the greenback.
Dominic Bunning, head of European FX Research, at HSBC wrote in his latest research note, that the
euro's strength, which has been more aggressive than in the summer, could be problematic for the European
Central Bank.
"A stronger currency tightens financial conditions, which is incredibly unhelpful for an economy
facing persistent disinflationary pressures," Bunning said.
The ECB holds its monetary policy meeting on Thursday.
Investors, meanwhile, continued to focus on Brexit trade deal talks.
With only three weeks to go for Britain to fully complete its exit from the European Union, leaders
have failed to narrow differences on a post-Brexit trade deal. The pound though trimmed earlier losses and briefly popped into positive territory after Britain said
it had clinched a deal with the European Union over how to manage the Ireland-Northern Ireland
border. GBP/
Against the dollar, the pound was last down 0.2% at $1.3354 GBP=D3 . It was also 0.1% lower against
the euro, which rose to 90.63 pence EURGBP=D3 .
Implied volatility on the pound - a measure of expected future swings in the currency - hit
eight-month highs, a sign that traders were preparing for gyrations. GBPSWO=FN GBPONO=FN
The dollar was up 0.1% against the yen at 104.16 yen JPY=EBS , but fell 0.2% versus the Swiss franc
to 0.8893 franc CHF=EBS .
========================================================
Currency bid prices at 3:13PM (2013 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.9660 90.8790 +0.11% +0.00% +91.0180 +90.7500
Euro/Dollar EUR=EBS $1.2102 $1.2109 -0.05% +7.95% +1.2134 +1.2096
Dollar/Yen JPY=D3 104.1650 104.0700 +0.09% -4.10% +104.2000 +104.0300
Euro/Yen EURJPY= 126.05 125.99 +0.05% +3.36% +126.2500 +125.8700
Dollar/Swiss CHF=EBS 0.8892 0.8909 -0.17% -8.09% +0.8914 +0.8882
Sterling/Dollar GBP=D3 1.3347 1.3383 -0.25% +0.65% +1.3391 +1.3289
Dollar/Canadian CAD=D3 1.2816 1.2800 +0.13% -1.34% +1.2825 +1.2769
Aussie/Dollar AUD=D3 0.7404 0.7419 -0.20% +5.53% +0.7435 +0.7400
Euro/Swiss EURCHF= 1.0762 1.0785 -0.21% -0.83% +1.0799 +1.0760
Euro/Sterling EURGBP= 0.9066 0.9049 +0.19% +7.22% +0.9116 +0.9051
NZ NZD=D3 0.7036 0.7042 -0.07% +4.58% +0.7053 +0.7023
Dollar/Dollar
Dollar/Norway NOK=D3 8.7705 8.7515 +0.05% -0.18% +8.7900 +8.7250
Euro/Norway EURNOK= 10.6167 10.5853 +0.30% +7.92% +10.6430 +10.5779
Dollar/Sweden SEK= 8.4771 8.3959 +0.86% -9.31% +8.4934 +8.3910
Euro/Sweden EURSEK= 10.2593 10.1723 +0.86% -2.00% +10.2815 +10.1675
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
ZEW https://tmsnrt.rs/2VSmEOo
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>