* Stimulus driven optimism dents dollar
* Crown rises as Norges Bank plans 2022 rate hike
* Bitcoin falls 10%
* Sterling at fresh 2-1/2 year high vs dollar
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Julien Ponthus
LONDON, Jan 21 (Reuters) - The euro clung to its gains on
Thursday after the European Central Bank stuck to its monetary
policy while expectations of a massive U.S. stimulus package
fuelled market optimism and sapped demand for safe-haven
currencies like the dollar.
The euro gained 0.4% against the dollar and traded at
$1.2153 EUR=EBS a few minutes after the ECB left its
ultra-easy policy unchanged as expected and kept the door open
to more stimulus to tackle the resurgent COVID-19 pandemic.
"While the idiosyncratic euro story remains unexciting (the
euro zone will not outperform the U.S. economy this year and any
ECB policy normalisation is a very distant story), we expect the
bearish dollar dynamics to dominate", ING strategists said prior
to the ECB announcement.
Many analysts expect the dollar to continue its downtrend
trend, which saw it lose nearly 7% in 2020 amid ultra-loose U.S.
monetary policy and hopes for a post-pandemic global recovery.
The U.S. currency typically loses out against its major
peers when investors are inclined to take on more risk.
Stock markets reached record highs on Wall Street and in
Asia following the inauguration of Joe Biden, amid hopes the
46th president of the United States would secure a $1.9 trillion
package to prop up the COVID-19 hit economy.
The dollar index =USD slipped 0.24% to 90.194, declining
for a third day after touching a nearly one-month high of 90.956
on Monday.
Norway's crown jumped 0.8% against the dollar to 8.4268
after the country's central bank said it planed to raise rates
early next year as the economy recovers from the coronavirus
pandemic. This could make it the first among G10 central banks
to raise the cost of borrowing. Sterling set a fresh 2-1/2 year high against the dollar and
a new 8-month high against the euro on Thursday on hopes that
Britain's brisk pace of COVID-19 vaccinations would lead to a
relatively quicker rebound in economic growth.
The dollar also lost 0.1% at 103.460 yen JPY=EBS on
Thursday, after dipping to a two-week low of 103.33.
The Bank of Japan kept monetary policy unchanged on Thursday
while revising up its economic forecast for next fiscal year.
The Aussie dollar AUD=D4 rose 0.3% to 77.71 U.S. cents,
adding to a 0.7% rally in the previous session. Australia
boasted another solid rise in employment in December, data
released Thursday showed. The U.S. currency slipped against the Canadian dollar, down
0.06% to C$1.2628 CAD=D4 after the Bank of Canada opted not to
cut interest rates.
Bitcoin BTC=BTSP slumped 10% on Thursday to a 10-day low,
retreating further from record highs, with traders citing fears
of tighter U.S. regulation. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
TAKE A LOOK-U.S. Inauguration Day - Biden to take office as U.S.
president ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>