Dollar hits two-year lows

forex signalsDollar hits two-year lows

LONDON (Reuters) -FX Signals | The dollar sunk to its lowest in more than two years in Asian trading on Wednesday and riskier currencies surged, as investors looked past the latest delay in U.S. fiscal stimulus and bet that global market risk appetite would increase in 2021.

U.S. Senate Majority Leader Mitch McConnell on Tuesday blocked a vote on increasing COVID-19 relief payments to $2,000, adding another delay to fractious negotiations over fiscal stimulus.

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But market sentiment was upbeat as investors remained optimistic that a fiscal stimulus deal will be eventually reached, lessening demand for the safe-haven dollar.

The latest setback “doesn’t really matter too much for investors as they have been over the moon on the back of news that there is still plenty of fiscal support for the U.S. economy,” Naeem Aslam, chief market analyst at Avatrade, said in a note.

Analysts expect the dollar to weaken further in 2021 as U.S. President-elect Joe Biden is expected to push for even more measures to support the U.S. economy.

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The “risk-on” moves in currency markets peaked in the Asian session on Wednesday, then eased off as European markets opened.

At 0816 GMT, the dollar was down around 0.1% versus a basket of currencies, at 89.895, having dropped as low as 89.711 overnight. The euro was up at $1.226.

The Australian dollar – seen as a liquid proxy for global risk appetite – was up 0.6% on the day at 0.76475 at 0825 GMT. The New Zealand dollar also hit two-year highs. Australian Dollar Hits Highest

The dollar lost out to the Japanese yen, with dollar-yen down 0.2% at 103.34 at 0834 GMT.

Forex Signals EURUSD Price Hits Resistance

Although the agreement avoids a chaotic no-deal exit, it does not cover services, which make up 80% of the British economy. Stocks Hit Limit Up

Commonwealth Bank of Australia (OTC:CMWAY) senior currency strategist Elias Haddad wrote in a note to clients that the fact that the deal does not provide an equivalence framework for financial service and growing support for Scottish independence are new headwinds for the pound. Euro to Pound Sterling Exchange Rate

Euro zone government bond yields edged up by around one basis point, with Germany’s benchmark 10-year yield at -0.56% at 0827 GMT. Forex Signals – Dollar off two-year low

Elsewhere, Bitcoin reached a record high of $28,599.99, taking its yearly gain for the world’s most popular cryptocurrency past 295%.

Dollar hits two-year lows