TOKYO (Reuters) – The dollar held a loss against most peers on Thursday as hopes of a major U.S. stimulus package under Joe Biden ‘s new stimulus boosts growth reducing demand for safe currencies.
Riskier currencies remained higher after U.S. stocks rose to new records overnight as Biden, which has announced plans for a $ 1.9 trillion pandemic relief package, was inaugurated as President.
The dollar fell to a three-year low against its counterpart in Canada on Wednesday after the Bank of Canada chose not to cut interest rates.
“Risk sentiment is very optimistic at the moment and we expect it to remain so this year, with growth expected to rebound strongly,” said Shinichiro Kadota, senior currency expert at Barclays. Capital in Tokyo.
The Canadian dollar and the Norwegian crown are likely to perform better, while European currencies weaken, he said.
The green should also strengthen this year as the United States recovers faster than most other countries, he said.
The U.S. currency slipped 0.1% to C $ 1.2623 in early Asian trading, declining for the third day and touching a three-year low at C $ 1.2607 overnight.
The dollar slipped 0.2% to 8.48 Norwegian crowns, also the third day of decline.
The Aussie dollar rose 0.1% to 77.505 US cents, adding a 0.7% rally in the previous session. Australia boasted another strong rise in employment in December, data released on Thursday showed.
Biden was inaugurated as the 46th president of the United States on Wednesday, voting to end the “illegal war” in a deeply divided country reaching out from a struggling economy and a coronavirus pandemic that killed more than 400,000 Americans.
North of the border, the Bank of Canada said Wednesday that COVID-19 vaccine revenue and stronger foreign demand are clearing the medium-term economic outlook, choosing to keep its key overnight interest rate at 0.25%. Money markets had been watching the prospect of a so-called miniature rate cut of less than 25 basis points.
Japan’s and Europe’s central banks will decide on policy on Thursday, with no expectation of any change.
The dollar was broadly flat at 103.59 yen on Thursday, another safe haven currency, after slipping to a two-week low of 103.45 overnight.
The euro gained 0.2%, returning a similar decline from the previous session, to trade at $ 1.21245.
European countries are struggling to keep the novel coronavirus at bay amid concerns that a new variant could lead to tougher locks and more economic pain.
The dollar index slipped 0.1% to 90.335, after closing almost unchanged on Wednesday.
Reciting with Kevin Buckland