* Brexit deal imminent, sterling surges
* Dollar dips despite Trump threat over stimulus package
* Euro hits $1.22, Aussie adds 0.7%
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 23 (Reuters) - The dollar slipped on Wednesday, after gaining for three straight sessions, as risk appetite rose on the expectation of an imminent Brexit trade deal between the UK and the European Union.
Sterling and the euro took off against the greenback after the Brexit headlines, as did currencies tied to higher risk appetite such as the Australian, Canadian, and New Zealand dollars.
Britain and the European Union appeared close to clinching a long-elusive trade agreement on Wednesday. A reporter with Britain's Daily Mail said a deal had already been done, and speculation flew that British Prime Minister Boris Johnson would make an announcement on Wednesday evening. Treasury yields rose in the wake of the Brexit news, in line with those in Europe and the UK.
In afternoon trading, the dollar fell 0.1% to 90.39 =USD .
The dollar index has weakened more than 6% this year as investors bet the U.S. Federal Reserve will keep its monetary policy ultra-accommodative. Expectations for further declines by the dollar are helping buoy stock markets and emerging-market currencies. have a lower uncertainty premium compared to March. The addition of the vaccines...has basically established what we have known since the summer which is a weaker dollar," said Mazen Issa, senior FX strategist, at TD Securities in New York.
David Rosenberg, chief economist and strategist at Rosenberg Research in a research note said technical measures suggested an increasing likelihood of an oversold bounce in the dollar.
"Longer-term, the dollar remains negative — trend, moving averages and intermediate-term momentum all remain in downtrends," he added.
U.S. data, meanwhile, was mixed on Wednesday but had little currency impact.
Initial jobless claims unexpectedly fell last week, though remained elevated, and a separate report showed consumer spending fell last month for the first time since April. U.S. new home sales were disappointing as well. euro rose 0.2% to $1.2180 EUR=EBS . The single currency earlier this month hit its highest in more than two-and-a-half years.
Sterling extended gains versus the dollar, rising above $1.35. The pound GBP=D3 which had earlier firmed on the lifting of a French border blockage, last traded up 0.9% at $1.3482. Against the euro, the pound jumped 0.8% at 90.33 pence EURGBP=D3 .
The Brexit headlines overshadowed President Donald Trump's threat to veto the U.S. stimulus bill. Trump said the long-awaited stimulus package should be amended to increase the amount in the stimulus checks -- potentially disrupting the bill. the Australian dollar gained 0.7% against the dollar to US$0.7575 AUD=D3 , boosted in part by signs that a small COVID-19 outbreak in Sydney would be contained. The New Zealand dollar also rose 0.7% to US$0.7091 NZD=D3 .
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Currency bid prices at 3:05PM (2005 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Dollar index
=USD
90.3980
90.4660
-0.07%
+0.00%
+90.6710
+90.1510 Euro/Dollar
EUR=EBS
$1.2180
$1.2162
+0.16%
+8.66%
+$1.2221
+$1.2155 Dollar/Yen
103.5900
103.6150
-0.03%
-4.69%
+103.6450 +103.3550 Euro/Yen
EURJPY=
126.16
126.04
+0.10%
+3.45%
+126.3800 +125.9400 Dollar/Swiss
0.8890
0.8893
-0.05%
-8.15%
+0.8911
+0.8870 Sterling/Dollar GBP=D3
$1.3482
$1.3377
+0.78%
+1.64%
+$1.3569
+$1.3361 Dollar/Canadian CAD=D3
1.2856
1.2908
-0.40%
-1.03%
+1.2914
+1.2835 Aussie/Dollar
AUD=D3
$0.7574
$0.7520
+0.73%
+7.96%
+$0.7591
+$0.7519 Euro/Swiss
EURCHF=
1.0827
1.0818
+0.08%
-0.23%
+1.0858
+1.0812 Euro/Sterling
EURGBP=
0.9031
0.9101
-0.77%
+6.83%
+0.9109
+0.9003 NZ
NZD=D3
$0.7090
$0.7043
+0.67%
+5.36%
+$0.7103
+$0.7031 Dollar/Dollar
Dollar/Norway
NOK=D3
8.6525
8.7390
-1.14%
-1.51%
+8.7545
+8.6350 Euro/Norway
EURNOK=
10.5400
10.6172
-0.73%
+7.14%
+10.6610
+10.5256 Dollar/Sweden
8.2955
8.3487
-0.35%
-11.26%
+8.3529
+8.2781 Euro/Sweden
EURSEK=
10.1039
10.1391
-0.35%
-3.49%
+10.1640
+10.0993
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