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FOREX-Dollar rallies in thin trading as focus still on virus variant

Published 23/12/2020, 02:22 am
© Reuters.
EUR/USD
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USD/JPY
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USD/CHF
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AUD/USD
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NZD/USD
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USD/SEK
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DX
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* Congress passes U.S. stimulus bill, awaits Trump approval

* Aussie, NZ dollar fall vs dollar

* U.S. housing, consumer confidence data disappoints

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, Dec 22 (Reuters) - The dollar rose on Tuesday in thin, choppy trading, as investors stepped back and assessed the implications of the U.S. stimulus bill that Congress passed overnight and a coronavirus variant raging in Britain.

There seemed to be a risk-off tone in the market, with U.S. stocks down except for Nasdaq, and U.S. Treasuries rallying. Currencies associated with higher risk appetite such as the Australian and New Zealand dollars, as well as the euro and sterling were also weaker against the greenback.

Tuesday's data were weaker than expected, with U.S. existing home sales falling more than expected in November and the consumer confidence index lower than forecast. the U.S. Congress passed a $892 billion COVID-19 aid package that aims to shore up the nation's pandemic response and bolster the battered economy. The coronavirus package is tied to general federal government funding to avert a government shutdown and is now awaiting President Donald Trump's approval to become law. stimulus was already baked in as something that would be done. In fact, it seems small and Democrats promised they will do more since more is indeed needed," said Juan Perez, senior trader at Tempus Consulting in Washington.

The new coronavirus variant, meanwhile, roiled markets earlier on Monday, but concerns have eased as medical experts seemed to indicate that the vaccines currently being deployed would be effective against it.

Moderna, for instance, expects immunity from its vaccine to protect against the variant and is performing more tests in coming weeks to confirm, the company said in a statement to CNN. truth is, COVID remains a thorn on the side of Europe and Asia alone isn't the world. This hemisphere and the other side of Atlantic," are lagging in terms of fighting the virus, Perez said.

In mid-morning trading, the dollar index rose 0.3% to 90.37 =USD , as the euro fell 0.2% to $1.2213 EUR=EBS .

The dollar's timid gains come in a market that is positioned for a weaker dollar. It's pricing in a pandemic recovery that lifts commodity prices and benefits exporters and their currencies at the expense of the dollar.

Sterling also slid against the dollar, down 0.9% at $1.3347 GBP=D3 . The pound sank versus the euro as well, down 0.5% at 91.44 pence per euro.

Talks between the French and British governments to reopen their border continued, but trade talks between the European Union and the UK remained stalled, with disagreements over fishing rights the main obstacle.

But Britain crashing out of the EU without a trade deal and expectations that the new coronavirus variant could worsen the economic outlook of Europe might dent the consensus, said Marios Hadjikyriacos, an analyst at XM.

The Australian dollar AUD= fell 0.7% to US$0.7532. The New Zealand dollar NZD= lost 0.8% to US$0.7040.

========================================================

Currency bid prices at 10:12AM (1512 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

90.4180

90.1320

+0.33%

+0.00%

+90.4740

+90.0550 Euro/Dollar

EUR=EBS

$1.2207

$1.2248

-0.35%

+8.87%

+$1.2257

+$1.2201 Dollar/Yen

JPY=EBS

103.6100

103.3150

+0.29%

-4.66%

+103.6350 +103.2950 Euro/Yen

EURJPY=

126.48

126.45

+0.02%

+3.71%

+126.6600 +126.1900 Dollar/Swiss

CHF=EBS

0.8874

0.8859

+0.17%

-8.29%

+0.8880

+0.8846 Sterling/Dollar GBP=D3

$1.3335

$1.3471

-0.98%

+0.57%

+$1.3467

+$1.3327 Dollar/Canadian CAD=D3

1.2906

1.2858

+0.39%

-0.64%

+1.2913

+1.2845 Aussie/Dollar

AUD=D3

$0.7527

$0.7587

-0.78%

+7.29%

+$0.7590

+$0.7527 Euro/Swiss

EURCHF=

1.0830

1.0841

-0.10%

-0.21%

+1.0847

+1.0822 Euro/Sterling

EURGBP=

0.9150

0.9094

+0.62%

+8.23%

+0.9154

+0.9084 NZ

NZD=D3

$0.7037

$0.7096

-0.82%

+4.59%

+$0.7105

+$0.7038 Dollar/Dollar

Dollar/Norway

NOK=D3

8.7165

8.6340

+1.00%

-0.59%

+8.7275

+8.6325 Euro/Norway

EURNOK=

10.6420

10.6020

+0.38%

+8.17%

+10.6588

+10.5540 Dollar/Sweden

SEK=

8.3144

8.2352

+0.62%

-11.05%

+8.3203

+8.2442 Euro/Sweden

EURSEK=

10.1501

10.0880

+0.62%

-3.12%

+10.1593

+10.0945

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