* New coronavirus strain overshadows U.S. stimulus deal
* U.S. dollar rises to 10-day high, but off peaks
* Pound drops close to 2% as virus disrupts freight
* Euro, Aussie, NZ dollar fall as risk-off mode reigns
* Bitcoin falls after hitting record high below $25,000
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Recasts, adds new comment, bitcoin, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 21 (Reuters) - The dollar gained against most currencies on Monday in a choppy,
holiday-shortened week, as a fast-spreading new coronavirus strain prevalent in Britain prompted investors
to seek safety in the greenback.
The dollar index hit a 10-day high earlier in the session, but then turned lower on the day. Analysts
said volatile moves are typical of this time of year when volumes are thin.
Sterling GBP=D3 fell to a 10-day low against the dollar and euro, as two-year British government
bonds dropped to a record low. Prime Minister Boris Johnson sought an emergency response to the crisis.
The pandemic stress in Europe overshadowed a weekend deal among U.S. congressional leaders for a $900
billion coronavirus aid package. European stock markets slid, while Wall Street shares sank after most of Europe cut off transport with
Britain, sowing chaos for families and companies just days before Britain is scheduled to complete its
exit from the European Union.
In midday trading, the dollar index edged 0.1% lower to 90.226, after it sank to two-and-a-half-year
lows last week, driven by optimism that vaccines would help to revive global growth. Earlier in the
session, it rose to a two-week high of 91.022.
The euro fell 0.2% to $1.2234, after earlier dropping to a 10-day trough.
"Euro/dollar is suffering a pullback with broad risk sentiment...as the world digests what to make of
this new strain of COVID-19, which is allegedly 70% more contagious, but we've noticed a couple waves of
'buy-the-dip' emerge in Europe today and we think this is because today's pullback is a counter-trend,"
said Erik Bregar, head of FX strategy, at Exchange Bank of Canada in Toronto.
The pound slumped 1.3% versus the dollar to $1.3340 GBP=D3 , while the euro gained 1% against
sterling to 91.69 pence EURGBP=D3 .
Unlike the pound, which faces structural challenges when Britain leaves the EU either with a deal or
no deal, the euro's strength isn't expected to suffer structurally, said Holger Schmieding, chief
economist at Berenberg.
He expects the euro to eventually resume its rise towards $1.25.
Bitcoin fell nearly 3% after hitting a record high of $24,298.04 on Sunday. The virtual currency was
last down at $22,759. The riskier Australian and New Zealand dollars weakened at the start of the week as investors rushed
for haven assets.
The Aussie dollar AUD=D3 dropped 0.6% to 75.78 U.S. cents, while the New Zealand dollar fell 0.7% to
70.92 U.S. cents.
The U.S. dollar gained 0.1% against the yen to 103.43 yen JPY= .
"I think we will still have a Biden administration that will exercise caution and maintain stricter
measures that could limit economic activity," said Edward Moya, senior market strategist at OANDA in New
York.
"We were expecting things to start getting to normal by the end of the first quarter; I think we will
have to push everything back."
========================================================
Currency bid prices at 12:37 PM (1737 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.2140 90.2810 -0.06% +0.00% +91.0220 +90.1870
Euro/Dollar EUR=EBS $1.2234 $1.2260 -0.20% +9.13% +$1.2243 +$1.2130
Dollar/Yen JPY=D3 103.4250 103.3200 +0.11% -4.77% +103.8850 +103.2950
Euro/Yen EURJPY= 126.52 126.61 -0.07% +3.75% +126.6300 +125.9200
Dollar/Swiss CHF=EBS 0.8856 0.8832 +0.28% -8.47% +0.8919 +0.8843
Sterling/Dollar GBP=D3 $1.3342 $1.3528 -1.37% +0.60% +$1.3468 +$1.3190
Dollar/Canadian CAD=D3 1.2834 1.2788 +0.38% -1.19% +1.2956 +1.2784
Aussie/Dollar AUD=D3 $0.7577 $0.7624 -0.61% +8.00% +$0.7605 +$0.7463
Euro/Swiss EURCHF= 1.0834 1.0821 +0.12% -0.17% +1.0847 +1.0799
Euro/Sterling EURGBP= 0.9169 0.9056 +1.25% +8.46% +0.9217 +0.9096
NZ NZD=D3 $0.7093 $0.7142 -0.70% +5.39% +$0.7122 +$0.7003
Dollar/Dollar
Dollar/Norway NOK=D3 8.6480 8.5940 +0.77% -1.28% +8.8650 +8.6310
Euro/Norway EURNOK= 10.5809 10.5150 +0.63% +7.55% +10.7585 +10.5256
Dollar/Sweden SEK= 8.2543 8.2512 -0.20% -11.69% +8.4336 +8.2562
Euro/Sweden EURSEK= 10.0991 10.1193 -0.20% -3.54% +10.2356 +10.0938