Dollar goes down for the 3rd session just as the feeling of danger rises

LONDON (Reuters) – The dollar plummeted against a basket of currencies for a third straight session on Wednesday as sentiment sentiment strengthened risky currencies such as the Aussie dollar and the euro.

The Australian dollar was the biggest mover in the G10 currency group, gaining half a percent to $ 0.7734. The New Zealand dollar was close to second, up 0.35% at $ 0.7140

Political unrest in Italy, with Prime Minister Giuseppe Conte getting a crucial vote to stay in power, helped lift the euro to $ 1.2158, which was already buoyant in a study that showed improved sentiment sentiment in Germany.

While the world monitors the inauguration of Joe Biden as U.S. President at noon in Washington (1700 GMT), traders focused more on his policies than the ceremony .

“Authorities have warned of potential armed protests across the country, which could cool the market sentiment (stock futures mark another positive opening), but a silent response has to the Capitol riots on January 6 suggests most assets – including the dollar – may have little impact on any event of social unrest today, ” ING said in a note to clients.

U.S. Treasury Secretary Janet Yellen’s nominee urged lawyers to “work hard” on incentive spending at her confirmation hearing and said she believes in exchange rates confirmed by him. market, not to comment on the direction of the dollar.

The index measuring the strength of the dollar against a basket of peers was down 0.1% at 90.390

While the dollar has gone up in the past few weeks due to a rise in U.S. Treasury yields, investors still expect the currency to weaken.

“We are still bearish U.S. dollar, and we expect the recession to start due to real U.S. yield,” said Ebrahim Rahbari, FX strategist at CitiFX.

“Fed’s ongoing misery remains important to our vision, as well as overcoming the world, so we will keep a close eye on Fed-talk.”

Position data shows investors extremely short dollars as they show budget and current account deficits weigh on the greenback.

UBS Global Wealth Management chief investment officer Mark Haefele confirmed a bearish view on the dollar, noting that pro-cycling currencies such as the euro, commodity currencies, and the pound would benefit “from a recovery economic expansion with the support of vaccine distribution ”.

Sterling traded 0.2% higher to the dollar at $ 1.3668, up for a third straight day.

Bitcoin cryptocurrency fell 1%, trading at $ 35,529.