* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
LONDON, Nov 30 (Reuters) - The dollar hit its lowest in two
and a half years in early London trading on Monday while riskier
currencies dipped slightly as the global equities rally paused
for breath.
Global market sentiment surged in November, causing the
dollar to fall and riskier currencies to benefit, as investors'
risk appetite was boosted by Joe Biden's victory in the U.S.
presidential election, a series of positive COVID-19 vaccine
developments and hopes for further stimulus.
The dollar was set for its biggest monthly loss against a
basket of currencies since July, having wiped 2.5% off its value
in November. At 0836 GMT it was at 91.654 =USD .
The New Zealand dollar, which is on track for its biggest
monthly gain since 2013, hit a new two-year high overnight, then
declined steadily. In early London trading, it was flat on the
day at 0.7034 versus the dollar NZD=D3 .
"The improving outlook for global growth combined with
strong signals from the Fed that it will maintain loose monetary
policy well into the economic recovery have been encouraging a
weaker U.S. dollar," wrote MUFG currency analyst Lee Hardman in
a note to clients.
"Asian and commodity related currencies have also been
benefiting from the outperformance of China's economy which has
been leading the global recovery from the COVID-19 shock,"
Hardman added.
China's manufacturing grew at its fastest pace in more than
three years in November, while services sector growth hit a
three-year high, data on Monday showed. The offshore yuan is on course for its longest streak of
monthly gains in six years, boosted by China's economic recovery
from the coronavirus and steady capital inflows. At 0839 GMT, it was broadly flat on the day at 6.5760 versus
the dollar CNH=EBS .
The Trump administration is poised to add China's top
chipmaker SMIC and national offshore oil and gas producer CNOOC
to a blacklist of alleged Chinese military companies, according
to a document and sources, curbing their access to U.S.
investors and escalating tensions with Beijing weeks before
Biden takes office. "The reports play into fears that President Trump will lash
out at his enemies including China during his lame duck session
which could trigger some short-term volatility in financial
markets," said MUFG's Hardman.
Elsewhere, the euro rose to new three-month highs of
$1.19830 EUR=EBS . Investors are closely watching for the key
$1.20 level, after the European Central Bank signalled earlier
this year that it was carefully monitoring the euro-dollar
exchange rate. Brexit negotiations remain the focus for the pound, which
was steady against the euro at 89.83 pence per euro EURGBP=D3 .
Britain and the European Union are running out of time to
agree on a Brexit trade deal, but if good progress is made this
week the talks could be extended, Britain's environment
secretary said. In focus for commodity-driven currencies such as the
Norwegian crown is the OPEC+ meeting which begins on Monday.
The Australian dollar slipped slightly, down 0.1% on the day
at 0.7379 at 0850 GMT AUD=D3 .