LONDON (Reuters) – The dollar went down near a 2-1 / 2-year low on Tuesday as investors were urged to take more risk after U.S. lawmakers pushed ahead with COVID-19 relief package developed.
The House of Representatives voted Monday on more than triple incentive payments to Americans up to $ 2,000 from $ 600, pushing the plan to the Senate for a vote.
The euro and the pound also strengthened when London reopened after the Christmas holidays. Traders were cracking down on the EU-UK Brexit trade agreement reached late last week with relief that a ‘no-deal’ was avoided.
Euro bulls were pushing the single currency up to $ 1.2235, also prompted by talk of an EU-China trade agreement. The pound was back above $ 1.35, while the dollar index was down 0.3% near the April 2018 low.
“The dollar is very heavy,” said Bart Wakabayashi, manager of the Tokyo Branch of the State Street Bank and Trust. “And that will continue into next year.”
Data released by the Futures Trading Commission on Monday showed that traders increased their bet against the green back in the week to December 21 to $ 26.6 billion. That was the highest level in three months, Reuters calculations found.
Sterling’s long positions grew ahead of the trade deal, the numbers also showed, although the next data set will reveal whether speculators sold the truth ”.
Sterling rose 0.2% to $ 1.3484 after a two-day dip. It was as high as $ 1.3625 this month, a level not seen since May 2018, but investors have taken some profits since the Brexit trade deal was struck.
Nick Nelson, head of European Equality Strategy, said the company’s FX strategists were targeting GBP / USD $ 1.44 by the end of 2021.
However, State Street’s Wakabayashi said, “Nothing has been agreed (between the EU and London) on financial markets, which is a huge negative for the UK.”
OPTIMISM EMERGING
Other currencies also rose. The Australian dollar rose 0.2% to 75.927 U.S. cents, while its New Zealand producer rose 0.3% to 71.19 U.S. cents.
The Chinese Yuan gained 0.2% to 6.5192 per dollar in the offshore market. It changed hands on land at 6.5310 per dollar while other heavy-duty market currencies, including Korean prize, Mexican peso and South African rand were also higher. [EMRG/FRX]
Bitcoin slipped 2.4% to $ 26,367, continuing to pull back from the high of $ 28,377.94 it had set on Sunday.
In the bond markets, German 10-year government bond yield fell below another base point to -0.57% and outperformed 10-year Financial yields, which were slightly higher at 0.945% after the U.S. bond auction.
Yields on 10-year southern European bonds – which are considered more risky with lower credit ratings – also fell rub. Bond yields move against price. ,,
Additional statement by Kevin Buckland in Tokyo; edited by Barbara Lewis