FOREX-Euro near three-month high as dollar takes a hit

* New Zealand dollar set to reach more than two-year high
* Nokkie, pound rise 0.5% versus dollar; Australian dollar
up 0.2%
Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Olga Cotaga
LONDON, Dec 1 (Reuters) - The euro was close to a
three-month high as the U.S. dollar on expectations of more
monetary stimulus from the United States and a strengthening
recovery elsewhere that pushed up riskier currencies.
One of the currencies to watch was the New Zealand dollar,
which was on course to reach its highest since June 2018.
Investors are short dollars as optimism about promising
vaccine trials drives buying of riskier currencies and higher-
yielding assets outside the United States. NETUSDG10=
Worries about rising coronavirus cases have not provided the
dollar with much support, as speculation grows that the Federal
Reserve will act to support the economy through a tough winter
before vaccinations become available.
The Fed meets to set policy on Dec. 15 and 16. Before then -
on Tuesday and Wednesday - Fed Chair Jerome Powell will appear
before Congress, and his remarks will be closely watched for any
clues as to the Fed's next moves.
Powell and Treasury Secretary Steven Mnuchin will testify on
the CARES Act, under which Congress made $2 trillion available
to the Treasury as coronavirus aid, a large portion of which was
aimed to support the FOMC's lending programs.
Less than two weeks ago, Mnuchin cut off the programs,
requesting that the Fed return unused funds and declined any
extension.
"With all that in mind, it will be interesting to see what
the two officials have to say on the matter, and whether Powell
will hint at other ways in stimulating the U.S, economy from a
monetary policy front," said Charalambos Pissouros, senior
market analyst at JFD Group.
"The U.S. government has yet to agree with Congress on a new
fiscal package, something that makes the case for the Fed to act
in December more likely," he said. If that happens, "the U.S.
dollar and other safe havens could come under selling pressure."
Euro/dollar was up 0.4% at $1.1968 EUR=EBS , close to
$1.2004, its highest since Sept. 1. An index that tracks the
dollar against a basket of currencies was down 0.2% at 91.74
=USD .
One of the biggest movers in the developed world was the
Norwegian crown, which rose 0.5% against the dollar to trade at
8.8435 NOK=D3 . The Swedish crown also rose 0.4% at 8.5355
SEK=D3 . Both gained versus the euro, too, albeit by a smaller
extend.
The British pound rose 0.5% against the dollar to a
three-month high of $1.3409 GBP=D3 . It was last up 0.4% on the
day.
The Australian dollar AUD=D3 inched up 0.2%. The New
Zealand dollar was close to breaking a more than two-year high
above 0.7051, last rising 0.4% at 0.7038.
Traders will be watching for the final euro zone
manufacturing PMI reading at 0900 GMT and an hour later for the
flash inflation numbers for November. Economists polled by
Reuters see inflation slightly subsiding.