* Control of both Houses gives Biden scope to push agenda
* Riskier currencies seen outperforming on growth prospects
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Kevin Buckland and Stanley White
TOKYO, Jan 7 (Reuters) - The dollar languished near its
lowest level in nearly three years on Thursday after Democrats
won control of the U.S. Senate, clearing the way for a larger
fiscal stimulus under President-elect Joe Biden. Currency markets were largely unperturbed by scenes of chaos
in Washington as supporters of outgoing President Donald Trump
stormed Capitol Hill. Analysts generally assume a Democrat-controlled Senate would
be a net positive for economic growth globally and thus for most
risk assets, but negative for bonds and the dollar as the U.S.
budget and trade deficits may widen further. The dollar index =USD rose 0.1% to 89.444 in Asian trade,
but still lay close to its overnight low of 89.206, a level not
seen since March 2018.
Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo, sees the dollar's fortunes split with
Democrats controlling both Houses.
"The dollar will remain weaker against commodity currencies
like the Aussie and emerging market currencies," which benefit
when risk sentiment is positive, he said.
At the same time, "higher Treasury yields should benefit the
dollar against the euro and the yen, because the dollar has
underpriced the potential for U.S economic recovery under
Biden."
The yield on the benchmark 10-year Treasury note
UST10YT=RR was at 1.0456% after climbing as high as 1.054% on
Wednesday for the first time since the market mayhem of
mid-March.
The riskier Australian dollar slipped 0.1% to 77.950 U.S.
cents AUD= after touching a nearly three-year high of 78.195
on Wednesday.
The euro EUR=EBS was mostly flat at $1.23260, after
climbing to $1.2349 on Wednesday for the first time since April
2018.
The dollar fell 0.1% to 103.145 yen JPY=EBS , after dipping
to 102.595 on Wednesday for the first time since March.
But after a fall of nearly 7% in 2020 for the dollar index
and a drop of as much as 0.9% in the new year, the U.S. currency
may get a degree of respite from some unwinding of a crowded
trade.
"People have been bearish on the dollar now for at least six
or nine months," said Minh Trang, senior FX trader at Silicon
Valley Bank in Santa Clara, California.
"Obviously you are going to have to take a little bit of a
breather every now and then."
The yuan was largely flat at 6.4596 per dollar CNY=CFXS
after Chinese authorities signalled a desire for a slower pace
of gains.
The remarks by the State Administration of Foreign Exchange
(SAFE) on Wednesday follows an advance of around 10% on the
greenback since last May as China's economic rebound has led the
world's pandemic recovery. The British pound GBP= slid 0.2% to $1.3589 as it
continued to meander below the almost three-year high of $1.3703
touched on Monday.
"With Brexit now behind us, we are starting to leg into
short-GBP positions," TD Securities strategists Mazen Issa and
Ned Rumpeltin wrote in an update of their FX model portfolio
dated Jan. 6.
"With the USD still trading on a uniformly weak footing,
however, ... we look to AUD and JPY to express GBP caution."
Bitcoin BTC=BTSP marked a fresh all-time high of $37,400
on Thursday, extending a surge of more the 800% since mid-March.
It last traded at $37,335.
========================================================
Currency bid prices at 12:19PM (319 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2325 $1.2328 -0.01% +0.89% +1.2345 +1.2319
Dollar/Yen JPY=D3 103.1450 103.0400 +0.12% -0.13% +103.2320 +103.1000
Euro/Yen EURJPY= 127.13 127.00 +0.10% +0.17% +127.2300 +126.9700
Dollar/Swiss CHF=EBS 0.8788 0.8781 +0.09% -0.67% +0.8793 +0.8778
Sterling/Dollar GBP=D3 1.3585 1.3610 -0.17% -0.55% +1.3631 +1.3573
Dollar/Canadian CAD=D3 1.2674 1.2680 -0.04% -0.46% +1.2679 +1.2665
Aussie/Dollar AUD=D3 0.7793 0.7806 -0.13% +1.35% +0.7816 +0.7791
NZ NZD=D3 0.7289 0.7295 -0.05% +1.53% +0.7303 +0.7286
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX