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FOREX-Dollar falls; sterling jumps as Brexit deal hopes lift risk appetite

Published 15/12/2020, 02:27 am
© Reuters.

(Updates prices, adds commentary; changes dateline, previous LONDON)

By Suzanne Barlyn

Dec 14 (Reuters) - The dollar fell close to two-year lows on Monday as renewed hopes for a Brexit deal and U.S. coronavirus relief plan, as well as progress on COVID-19 vaccines, lifted riskier currencies.

The pound gained after the UK and European Union agreed on Sunday to continue Brexit talks and the EU's chief negotiator said a deal was still possible. pound has basically reversed all of its losses from last week, and I think that's just helping the risk on sentiment," said Vassili Serebriakov, an FX strategist at UBS in New York.

The pound was last up 1.16% versus the dollar, at $1.3375 - a jump from its low point of $1.3133 on Friday GBP=D3 . Versus the euro, it was last at .9089 pence with the euro down 0.71% on the day. EURGBP=D3 .

"The reality here is that neither side, especially the EU, wants to be seen as walking away from negotiations and sparking a no deal Brexit," Scotiabank FX strategists wrote in a note to clients.

Wall Street's main indexes opened higher on Monday as travel stocks surged on the launch of a nationwide COVID-19 vaccine campaign, while Alexion Pharmaceuticals (NASDAQ:ALXN) jumped following a bumper buyout offer from Britain's AstraZeneca. dollar was last down 0.24% against a basket of currencies at 90.544 =USD , after earlier dropping to 90.419, the lowest since April 2018.

A $908 billion bipartisan COVID-19 relief plan, which could be introduced in the U.S. Congress as early as Monday, will be split into two packages, a person briefed on the matter said. dollar net short positioning in the latest week climbed to its highest since late September, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. another development on Monday, the Bank of Israel bought "hundreds of millions" of dollars during an intervention in the foreign exchange market in a bid to contain the shekel's ILS= appreciation, a market source told Reuters.

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The shekel stands at a 12-1/2-year peak of 3.257 per dollar after gaining more than 6% in 2020. The central bank has bought some $17 billion of foreign currency so far this year -- with $1.9 billion coming in November. risky Australian and New Zealand dollars were also up, with the New Zealand dollar reaching its strongest since April 2018 at 0.712 NZD=D3 .

The Aussie - a liquid proxy for risk - was last up 0.33% versus the dollar at 0.7560 AUD=D3 .

The euro rose around 0.42% versus the dollar, at $1.2159. New coronavirus restrictions on activity in Europe - including a strict lockdown in Germany - had limited market impact. China's yuan rose against the dollar as market participants shrugged off an attempt by the Chinese central bank to stem yuan appreciation by reducing capital inflows. 1223 GMT, the dollar was down around 0.2% on the day versus the offshore yuan, at 6.5251 CNH=EBS .

For the week ahead, market participants will focus on a series of central bank meetings, including the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday. is going to be a lot to digest," said UBS' Serebriakov. ========================================================

Currency bid prices at 9:51AM (1451 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

$90.5440

90.7780

-0.24%

+0.00%

+90.9070

+90.4190 Euro/Dollar

EUR=EBS

$1.2159

$1.2108

+0.42%

+8.45%

+1.2177

+1.2110 Dollar/Yen

JPY=D3

103.7200

104.0150

-0.31%

-4.53%

+104.0550 +103.6200 Euro/Yen

EURJPY=

126.10

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125.96

+0.11%

+3.40%

+126.3800 +125.9200 Dollar/Swiss

CHF=EBS

0.8864

0.8898

-0.38%

-8.40%

+0.8895

+0.8851 Sterling/Dollar GBP=D3

1.3375

1.3222

+1.16%

+0.84%

+1.3444

+1.3270 Dollar/Canadian CAD=D3

1.2743

1.2766

-0.18%

-1.91%

+1.2763

+1.2720 Aussie/Dollar

AUD=D3

0.7560

0.7535

+0.33%

+7.75%

+0.7578

+0.7524 Euro/Swiss

EURCHF=

1.0777

1.0774

+0.03%

-0.69%

+1.0792

+1.0764 Euro/Sterling

EURGBP=

0.9089

0.9154

-0.71%

+7.51%

+0.9119

+0.9046 NZ

NZD=D3

0.7109

0.7085

+0.35%

+5.66%

+0.7119

+0.7080 Dollar/Dollar

Dollar/Norway

NOK=D3

8.7155

8.8145

-1.28%

-0.80%

+8.8095

+8.6965 Euro/Norway

EURNOK=

10.5965

10.6783

-0.77%

+7.71%

+10.6904

+10.5750 Dollar/Sweden

SEK=

8.3869

8.4506

-0.37%

-10.27%

+8.4620

+8.3647 Euro/Sweden

EURSEK=

10.1986

10.2367

-0.37%

-2.58%

+10.2560

+10.1800

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