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FOREX-Dollar weakens as market looks to U.S. stimulus; sterling falls

Published 07/12/2020, 21:33
Updated 07/12/2020, 21:36
© Reuters.
USD/SEK
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DX
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* Yen, Swiss franc rise vs greenback
* Sterling falls vs dollar, euro on Brexit uncertainty
* U.S. stimulus talks in right direction, Kudlow says
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 7 (Reuters) - The dollar slid against most currencies on Monday in choppy trading, as
investors looked past the surge in coronavirus cases and ahead to a possible new COVID-19 U.S. stimulus
deal and vaccines to fight the pandemic.
Sterling, meanwhile, slumped after Britain and the European Union said on Monday conditions for a
Brexit trade deal were "not there."
White House economic adviser Larry Kudlow on Monday said talks on another round of stimulus funding to
deal with the deadly coronavirus pandemic are moving in the right direction, and President Donald Trump's
administration and Congress are getting closer to agreement. The United States has experienced increasing numbers of COVID-19 cases, with a death toll of about
283,000.
Negotiations on a relief deal gathered momentum in the U.S. Congress on Friday, as a bipartisan group
of lawmakers worked to put the finishing touches on a $908 billion stimulus plan.
"The market expects a stimulus deal to eventually arrive along with the vaccine and those are seen as
putting the U.S. recovery at a faster and more sustainable path," said Joe Manimbo, senior market analyst
at Western Union Business Solutions in Washington. "That's negative for the dollar."
In addition, the Federal Reserve is expected to make more adjustments to its quantitative easing later
this month.
"The question for most is whether this is just the beginning of the U.S. dollar slide and whether the
theme has more juice," said Mark McCormick, global head of FX strategy at TD Securities in Toronto.
"The U.S. dollar is likely to slide through the course of 2021. U.S. dollar cycles tend to last six
years on average, and this one is just getting started," he added.
The dollar fell 0.2% against the Japanese currency to 104.01 yen JPY=EBS , sliding as well versus the
Swiss franc to 0.8904 franc, also down 0.2%.
The greenback also fell against commodity currencies such as the Australian AUD=D3 and New Zealand
dollars NZD=D3 as well as the Norwegian crown NOK=D3 .
An index that tracks the dollar against a basket of currencies was little changed at 90.843 =USD ,
not far from 90.471, its weakest since April 2018.
The British pound came off steep lows and was down 0.4% at $1.3379 GBP=D3 , falling 0.4 as well
versus the euro, which last traded up at 90.52 pence EURGBP=D3 .
EU chief Ursula von der Leyen and British Prime Minister Boris Johnson said in a joint statement on
Monday that sealing a new trade deal was impossible now "due to remaining differences on critical issues."
But Johnson will go to Brussels in the coming days in an attempt to bridge significant differences in
Brexit talks over level playing field, governance and fisheries. "The market is still betting that at the end of the day, there will be a Brexit deal," said Western
Union's Manimbo.

========================================================
Currency bid prices at 3:19PM (2019 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD $90.8340 90.8300 +0.02% +0.00% +91.2410 +90.6120
Euro/Dollar EUR=EBS $1.2114 $1.2121 -0.05% +8.06% +1.2166 +1.2079
Dollar/Yen JPY=D3 104.0150 104.2050 -0.21% -4.26% +104.3050 +103.9800
Euro/Yen EURJPY= 126.01 126.26 -0.20% +3.33% +126.4800 +125.9800
Dollar/Swiss CHF=EBS 0.8905 0.8918 -0.15% -7.98% +0.8946 +0.8875
Sterling/Dollar GBP=D3 1.3378 1.3431 -0.38% +0.88% +1.3436 +1.3225
Dollar/Canadian CAD=D3 1.2804 1.2786 +0.17% -1.41% +1.2832 +1.2765
Aussie/Dollar AUD=D3 0.7422 0.7426 -0.05% +5.78% +0.7453 +0.7374
Euro/Swiss EURCHF= 1.0787 1.0808 -0.19% -0.60% +1.0814 +1.0782
Euro/Sterling EURGBP= 0.9053 0.9014 +0.43% +7.09% +0.9140 +0.9021
NZ NZD=D3 0.7039 0.7041 -0.01% +4.62% +0.7063 +0.7006
Dollar/Dollar
Dollar/Norway NOK=D3 8.7430 8.7940 -0.68% -0.43% +8.9170 +8.6990
Euro/Norway EURNOK= 10.5948 10.6540 -0.56% +7.69% +10.7788 +10.5751
Dollar/Sweden SEK= 8.4025 8.4465 -0.68% -10.11% +8.5223 +8.3541
Euro/Sweden EURSEK= 10.1793 10.2492 -0.68% -2.77% +10.3000 +10.1610

(Reporting Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci, Will Dunham and Cynthia Osterman)

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