FOREX-Dollar wavers, pound swung by Brexit gyrations

* FX markets shrug off Trump threat not to sign aid bill
* Dollar has slumped this year on pandemic recovery hopes
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Kevin Buckland
TOKYO, Dec 23 (Reuters) - The dollar wavered against major
peers in choppy trade on Wednesday as uncertainty about U.S.
fiscal stimulus, Brexit and the pandemic recovery pushed
investors into and out of riskier bets.
In holiday-thinned trade, the pound rebounded from a
three-day decline as time runs out for London to reach a trade
deal with Brussels before the UK completes its exit from the
European Union at year-end.
The dollar index =USD was little changed at 90.447 in
Asian hours, after advancing 0.5% on Tuesday. It remains on
track for a more than 6% decline this year.
The market has been positioned for a pandemic recovery that
lifts global growth, sapping demand for the greenback and other
haven currencies.
The riskier Australian dollar gained 0.5% to $0.75515
AUD= , while the euro added 0.2% to $1.21875 EUR=EBS .
Sterling rose 0.2% to $1.3384 GBP=D4 , on track to end a
three-day slide.
"People have some concerns about COVID and about Brexit, but
it's not at the point where the positive sentiment has turned,"
said Shinichiro Kadota, senior currency strategist at Barclays
Capital in Tokyo.
"We expect the dollar to remain weak."
U.S. Congress passed an $892 billion COVID-19 aid package
overnight, and vaccine rollouts are gaining
momentum. That development has since been clouded by President Donald
Trump's threat not to approve the stimulus bill, saying it
should be amended to increase the amount in the stimulus checks,
though this has had little impact on currency markets so far.
"I don't know how much of this is posturing by Trump or if
he's really demanding these changes," said Barclays' Kadota.
"The muted reaction so far suggests the foreign-exchange
market expects the bill to pass in some form."
The dollar slipped 0.1% to 103.47 yen JPY=EBS , another
traditional haven.
It was little changed at 6.5402 Chinese yuan in the offshore
market. It changed hands at 6.5495 yuan on-shore.
With only days left before the UK leaves the EU's trade
orbit, the pound has vacillated as it awaits signs of progress
in negotiations.
A deal is possible on Wednesday, an ITV reporter tweeted,
just hours after saying there would be no agreement before
Christmas. Earlier, the EU's chief negotiator said the bloc is making a
"final push" for a trade deal, although there are still deep
rifts over fishing rights. "The market is just waiting for the final result of Brexit
talks, and in the meantime being swung by conflicting
headlines," Barclays' Kadota said.
"Sterling will remain volatile."