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FOREX-Dollar on back foot as Biden optimism bolsters riskier currencies

Published 21/01/2021, 12:47 pm
© Reuters.
EUR/USD
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BARC
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DX
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* Greenback and other traditional havens lag as stocks hit records

* Canadian dollar paced gains in commodity currencies overnight

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

By Kevin Buckland

TOKYO, Jan 21 (Reuters) - The dollar held losses versus most major peers on Thursday as optimism that a massive U.S. stimulus package under the new Joe Biden administration will bolster growth sapped demand for safe-haven currencies.

Riskier commodity currencies remained higher after U.S. stocks rose to new records overnight as Biden, who has laid out plans for a $1.9 trillion pandemic relief package, was sworn in as President.

The dollar tumbled to a three-year low against its Canadian counterpart on Wednesday after the Bank of Canada opted not to cut interest rates. sentiment is quite positive right now and we expect it to remain so this year, with growth expected to rebound quite strongly," said Shinichiro Kadota, senior currency strategist at Barclays (LON:BARC) Capital in Tokyo.

The Canadian dollar and Norwegian crown are likely to outperform, while European currencies lag, he said.

The greenback should also strengthen this year as the United States recovers faster than most other countries, he added.

The U.S. currency slipped 0.1% to C$1.2623 CAD=D4 in early Asian trading, declining for a third day and touching a three-year low at C$1.2607 overnight.

The dollar slid 0.2% to 8.48 Norwegian crowns NOK= , also a third day of declines.

The Aussie dollar AUD=D4 rose 0.1% to 77.505 U.S. cents, adding to a 0.7% rally in the previous session. Australia boasted another solid rise in employment in December, data released Thursday showed. was sworn in as the 46th president of the United States on Wednesday, vowing to end the "uncivil war" in a deeply divided country reeling from a battered economy and a raging coronavirus pandemic that has killed more than 400,000 Americans. of the border, the Bank of Canada said Wednesday that the arrival of a COVID-19 vaccine and stronger foreign demand is brightening the economic outlook in the medium term, opting to hold its key overnight interest rate at 0.25%. Money markets had been watching the prospect of a so-called micro rate cut of less than 25 basis points. Japanese and European central banks decide on policy Thursday, with no change expected.

The dollar was mostly flat at 103.59 yen JPY=EBS on Thursday, another safe haven currency, after sliding to a two-week low of 103.45 overnight.

The euro gained 0.2%, reversing a similar decline from the previous session, to trade at $1.21245 EUR=EBS .

European countries are struggling to contain the novel coronavirus amid worries that a new variant could lead to more stringent lockdowns and more economic pain.

The dollar index =USD slipped 0.1% to 90.335, after closing almost unchanged on Wednesday.

Full coverage for Eikon readers of the U.S. presidential transition https://emea1.apps.cp.thomsonreuters.com/cms/?navid=20856

For multimedia coverage please open https://www.reuters.com/world/us in a separate browser

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Currency bid prices at 10:19AM (119 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.2127

$1.2106

+0.18%

-0.74%

+1.2130

+1.2106 Dollar/Yen

JPY=D3

103.5020

103.5500

-0.02%

+0.23%

+103.6520 +103.5300 Euro/Yen

EURJPY=

125.52

125.33

+0.15%

-1.10%

+125.5900 +125.3300 Dollar/Swiss

CHF=EBS

0.8886

0.8898

-0.12%

+0.45%

+0.8899

+0.8887 Sterling/Dollar GBP=D3

1.3675

1.3660

+0.15%

+0.14%

+1.3679

+1.3656 Dollar/Canadian CAD=D3

1.2615

1.2635

-0.17%

-0.94%

+1.2634

+1.2612 Aussie/Dollar

AUD=D3

0.7767

0.7747

+0.27%

+0.98%

+0.7772

+0.7746 NZ

NZD=D3

0.7192

0.7170

+0.33%

+0.18%

+0.7198

+0.7173 Dollar/Dollar

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

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates

https://tmsnrt.rs/2RBWI5E TAKE A LOOK-U.S. Inauguration Day - Biden to take office as U.S. president

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