NVDA gained a massive 197% since our AI first added it in November - is it time to sell? 🤔Read more

FOREX-Dollar loses some bounce as focus shifts to Fed

Published 01/12/2020, 04:18 pm
Updated 01/12/2020, 04:24 pm
© Reuters.
EUR/USD
-
GBP/USD
-
USD/CHF
-
AUD/USD
-
NZD/USD
-
USD/CNY
-
PFE
-
DX
-
BTC/USD
-
USD/CNH
-
MRNA
-

* AUD, NZD and euro inch higher as traders fade dollar bounce

* Fed Powell testimony before Congress begins at 1500 GMT

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook

SYDNEY, Dec 1 (Reuters) - An under pressure U.S. dollar handed back part of its month-end bounce on Tuesday, as investors reckoned on more monetary easing by the Federal Reserve and a gathering recovery elsewhere.

The risk-sensitive Australian and New Zealand dollars edged higher, with the Aussie AUD=D3 up 0.3% and the kiwi NZD=D3 up 0.5%. The euro EUR= rose 0.3%, though all three currencies remained below where they sat before Monday's dollar bounce.

Sterling GBP= crept higher as traders clung to hopes for a Brexit trade deal before the year's end and the yen edged down to a week low as equities rose with the broadly upbeat mood.

Investors are heavily short dollars as optimism about promising vaccine trials drives buying of riskier currencies and higher yielding assets outside the United States. 0#NETUSDFX=

Even worries about rising coronavirus cases have not offered too much support to the greenback, as speculation grows that the Federal Reserve might act to support the economy through a tough winter before vaccinations can turn the tide on the pandemic.

"There's a general view that there'll be something in the December meeting...given there's no real fiscal development in the last few months," said BNZ senior markets strategist Jason Wong.

The Fed meets to set policy on Dec. 15 and 16, though 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 next moves.

The policymakers gather as authorities mull approving two effective vaccines, developed by Pfizer (NYSE:PFE) PFE.N and Moderna MRNA.O for distribution, while at the same time surging virus cases have put the brakes on the U.S. economic recovery. in prepared remarks released on Monday, said a "challenging" few months lie ahead and that it is difficult to assess the economic implications of vaccine developments yet.

"A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities," he said. a basket of currencies the dollar =USD was a fraction softer at 91.825, after struggling to find traction above 92.000 on Monday.

Elsewhere in Asia, the Chinese yuan CNH= was back on the front foot - holding firm onshore and snapping three sessions of losses in offshore trade after decade-high factory activity growth figures underscored China's remarkable recovery. CNY/

It last traded at 6.5751 per dollar onshore CNY= .

The Reserve Bank of Australia, meanwhile, left policy settings unchanged on Tuesday, as expected. Philip Lowe's statement was cautiously optimistic but said it would take until the end of next year for gross domestic product to recover 2019 levels and emphasised that the rebound's momentum depended on policy support.

European inflation figures and U.S. manufacturing data is due later on Tuesday.

Britain and the European Union also warned each other on Monday that time was running out to reach a Brexit trade deal, though investors remain hopeful and have kept the pound GBP= at $1.3361 and 89.46 pence per euro EURGBP= . between EU chief negotiator Michel Barnier and British chief negotiator David Frost are ongoing and the EU team are expected to stay in London for two or three more days. GBP/

"Further talk that we could see a deal in the next few days makes shorting the pound tough," said Chris Weston, head of research at brokerage Pepperstone in Melbourne.

"Although once we get a deal, and assuming it does play out, then sterling may offer some good shorting opportunities as it turns less political and stands out as a funding currency – the fiscal situation makes for some incredibly sobering reading."

Bitcoin BTC=BTSP was down about 2% and, at $19,354, just below a record high of $19,864 hit on Monday. bid prices at 4:00PM in Sydney(0500 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1957

$1.1923

+0.29%

+6.66%

+1.1960

+1.1927 Dollar/Yen

JPY=D3

104.3850

104.3350

+0.10%

-3.85%

+104.4600 +104.2500 Euro/Yen

EURJPY=

124.82

124.39

+0.35%

+2.35%

+124.9200 +124.4100 Dollar/Swiss

CHF=EBS

0.9071

0.9092

-0.22%

-6.25%

+0.9087

+0.9070 Sterling/Dollar GBP=D3

1.3361

1.3325

+0.27%

+0.74%

+1.3365

+1.3328 Dollar/Canadian CAD=D3

1.2968

1.3008

-0.30%

-0.17%

+1.3008

+1.2966 Aussie/Dollar

AUD=D3

0.7367

0.7345

+0.31%

+5.00%

+0.7371

+0.7344 NZ

NZD=D3

0.7034

0.7010

+0.36%

+4.55%

+0.7041

+0.7011 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.