* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Dec 22 (Reuters) - The dollar was firm on Tuesday
but traded well below peaks hit on a wild ride higher overnight,
as a new coronavirus strain in Britain sent jitters through
holiday-thinned currency markets.
Sterling GBP= fell as much as 2.5% to $1.3190 as countries
from Europe to Asia sealed off travel links with Britain to try
and contain the highly-infectious mutation. Low liquidity exaggerated dollar gains in other currencies,
too, as short sellers bailed out. But moves largely unwound as
investors took their chance to buy in to the dollar's downtrend.
The pound, helped by a Bloomberg report which said the
European Union was considering a compromise on fishing rights -
a stumbling block to a trade deal - recovered to trade at
$1.3418 in Asia, though it remained on edge as talks progress.
The euro EUR= recovered to sit at $1.2229 on Tuesday after
falling a cent to $1.2130. The yen JPY= was steady at 103.30
per dollar and the Australian and New Zealand dollars a little
soft with the nervous mood, but well above overnight lows.
"The euro found an abundance of buyers on the deep dip,"
said Stephen Innes, Bangkok-based chief strategist at currency
broker Axi.
"The 'short dollar' clear-out is probably nothing more
nefarious than stretched positioning getting taken out to the
woodshed on Brexit scares. However, it shows the potential
dangers of universally bearish dollar sentiment," he said.
Wagers on a falling dollar as the global COVID-19 recovery
lifts world trade and commodity prices, tending to benefit
export-driven economies and their currencies, is becoming an
increasingly crowded trade as momentum funds pile in.
The value of overall bets against the dollar eased a
fraction last week, positioning data showed, but remains near
nine-year highs struck in September. 0#NETUSDFX=
Against a basket of currencies =USD the dollar is headed
for a third quarterly loss in a row and is down 12.5% from a
three-year peak in March.
The dollar index was last at 90.145 having been as high as
91.022 overnight. Nerves over the new strain of coronavirus are
keeping it above last week's 2-1/2 year trough of 89.723.
Together with a new outbreak in Sydney, that held the
Australian dollar AUD=D3 at $0.7566, 0.3% lower for the
session, despite roaring retail sales figures.
Experts said there was no evidence that vaccines would not
protect against the new virus variant, but Britain's chief
scientific adviser said that in the meantime tighter
restrictions on public life in Britain were likely. Investors are looking ahead to confidence data in the U.S.
and Germany later on Tuesday and have been cheered by the
expectation that stimulus checks could go out to Americans next
week. British Prime Minister Boris Johnson has warned that there
are still "problems" in securing a trade deal with Europe, but
financial markets remain hopeful that something can be struck
before Britain's exemption from tariffs expires on Dec. 31.
Currency bid prices at 9:04AM in Singapore (104100 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2232 $1.2248 -0.12% +9.11% +1.2250 +1.2228
Dollar/Yen JPY=D3 103.3300 103.3550 -0.03% -4.88% +103.3550 +103.3200
Euro/Yen EURJPY= 126.39 126.45 -0.05% +3.64% +126.5500 +126.3600
Dollar/Swiss CHF=EBS 0.8857 0.8859 -0.01% -8.45% +0.8862 +0.8855
Sterling/Dollar GBP=D3 1.3421 1.3471 -0.35% +1.21% +1.3467 +1.3418
Dollar/Canadian CAD=D3 1.2858 1.2858 +0.01% -1.02% +1.2864 +1.2845
Aussie/Dollar AUD=D3 0.7568 0.7587 -0.24% +7.87% +0.7590 +0.7567
NZ NZD=D3 0.7083 0.7096 -0.16% +5.29% +0.7105 +0.7084
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX