FOREX-Euro near three-month high as dollar takes a hit; Bitcoin at new high

* New Zealand dollar set to reach more than two-year high
* Commodity-linked currencies gains vs U.S. dollar
* Canadian dollar shy of a two-year high
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

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By Olga Cotaga
LONDON, Dec 1 (Reuters) - The euro was close to a
three-month high on Tuesday as the U.S. dollar fell on
expectations of more monetary stimulus from the United States
and a strengthening recovery elsewhere 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.
Bitcoin reached a record high of $19,918 BTC=BTSP . Traders
were watching for the next hurdle of $20,000 for the
cryptocurrency.
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. Speculation is growing 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," Pissouros said. If that happens, "the
U.S. dollar and other safe havens could come under selling
pressure."
Euro/dollar was up 0.3% at $1.1964 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 91.79
=USD .
Euro zone inflation remained in negative territory for the
fourth straight month in November, reinforcing European Central
Bank concerns that the drop in prices may persist as
deflationary forces intensify amid a deep recession.
"The euro won't go up fast," said Kit Juckes, macro
strategist at Societe Generale. It "will only do so as the
dollar falls more broadly."
The euro zone "will likely lag other countries which aren't
standing so firmly in the way of currency appreciation. The
Nokkie and the Swedish crown ought to do better than the euro
next year," Juckes said.
The Norwegian crown rose 0.4% against the dollar to trade at
8.8590 NOK=D3 . The Swedish crown rose 0.5% at 8.5345 SEK=D3 .
Both gained versus the euro, too, albeit by a smaller amount.
The British pound rose 0.2% against the dollar to $1.3347,
after reaching a three-month high of $1.3409 GBP=D3 earlier in
the session.
The Australian dollar AUD=D3 inched up 0.1% at 0.7349. The
New Zealand dollar was close to breaking a more than two-year
high above 0.7051, last rising 0.3% at 0.7029.
The Canadian dollar CAD=D3 rose 0.3% at 1.2971 against its
U.S. counterpart, shy of a two-year high.