* Brexit deal imminent, sterling surges
* Dollar dips despite Trump threat over stimulus package
* Euro hits $1.22, Aussie adds 0.7%
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds new comment, U.S. data, FX table, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 23 (Reuters) - The dollar struggled on Wednesday, after gaining for three straight
sessions, as risk appetite grew on expectation of an imminent post-Brexit trade deal between the UK and
the European Union.
Sterling and the euro took off against the greenback after the Brexit headlines, as did currencies
tied to higher risk appetite such as the Australian, Canadian, and New Zealand dollars.
Reuters reported, citing sources, that EU states have started to prepare their procedure to put in
place a new trade deal with the United Kingdom from Jan. 1, indicating a deal could be imminent.
U.S. Treasury yields rose, in line with those in Europe and the UK.
In mid-morning trading, the dollar fell 0.3% to 90.16 =USD .
The dollar index has weakened more than 6% this year as investors bet the U.S. Federal Reserve will
keep its policy ultra-easy. Expectations for further declines by the dollar are helping buoy stock markets
and emerging-market currencies. "We have a lower uncertainty premium compared to March. The addition of the vaccines...has basically
established what we have known since the summer which is a weaker dollar," said Mazen Issa, senior FX
strategist, at TD Securities in New York.
But he said he would not be surprised if the dollar rallies into the new year simply because of
technical and momentum indicators.
U.S. data was mixed on Wednesday, but had little currency impact.
Initial jobless claims unexpectedly fell last week, though remained elevated, and a separate report
showed consumer spending fell last month for the first time since April. U.S. new home sales were
disappointing as well. The euro rose 0.4% to $1.2207 EUR=EBS . The single currency earlier this month hit its highest in
more than two-and-a-half years.
Sterling extended gains versus the dollar, rising above $1.35. The pound GBP=D3 which had earlier
firmed on the lifting of a French border blockage, last traded up 1.1% at $1.3526. Against the euro, the
pound jumped 0.9% at 90.23 pence EURGBP=D3 .
The Brexit headlines overshadowed President Donald Trump's threat to veto the U.S. stimulus bill.
Trump said the long-awaited stimulus package should be amended to increase the amount in the stimulus
checks -- potentially disrupting the bill. Elsewhere, the Australian dollar gained 0.8% against the dollar to US$0.7578 AUD=D3 , boosted in part
by signs that a small COVID-19 outbreak in Sydney would be contained. The New Zealand dollar also rose 0.7
to US$0.7090 NZD=D3 .
The dollar dropped 0.2% against the Japanese yen JPY=EBS , another safe haven, to 103.44.
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Currency bid prices at 10:24AM (1524 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.2580 90.4660 -0.21% +0.00% +90.6710 +90.1510
Euro/Dollar EUR=EBS $1.2204 $1.2162 +0.35% +8.86% +$1.2221 +$1.2155
Dollar/Yen JPY=EBS 103.4650 103.6150 -0.14% -4.80% +103.6350 +103.3550
Euro/Yen EURJPY= 126.26 126.04 +0.17% +3.53% +126.3800 +125.9400
Dollar/Swiss CHF=EBS 0.8883 0.8893 -0.10% -8.20% +0.8911 +0.8870
Sterling/Dollar GBP=D3 $1.3506 $1.3377 +0.99% +1.85% +$1.3569 +$1.3361
Dollar/Canadian CAD=D3 1.2867 1.2908 -0.29% -0.93% +1.2914 +1.2847
Aussie/Dollar AUD=D3 $0.7576 $0.7520 +0.72% +7.95% +$0.7591 +$0.7519
Euro/Swiss EURCHF= 1.0839 1.0818 +0.19% -0.12% +1.0858 +1.0812
Euro/Sterling EURGBP= 0.9030 0.9101 -0.78% +6.81% +0.9109 +0.9003
NZ NZD=D3 $0.7089 $0.7043 +0.64% +5.34% +$0.7103 +$0.7031
Dollar/Dollar
Dollar/Norway NOK=D3 8.6645 8.7390 -1.08% -1.45% +8.7545 +8.6450
Euro/Norway EURNOK= 10.5750 10.6172 -0.40% +7.49% +10.6610 +10.5499
Dollar/Sweden SEK= 8.2888 8.3487 -0.23% -11.33% +8.3529 +8.2781
Euro/Sweden EURSEK= 10.1156 10.1391 -0.23% -3.38% +10.1640 +10.1112
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