Dollar Up, Steadies as Investors Await Georgia Election Results

 

By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia, steadying as vote counting continues for a U.S. Senate runoff election in the state of Georgia and investors awaiting the results to determine market sentiment’s next move.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.15% to 89.547 by 11:16 PM ET (4:16 AM GMT), briefly falling to a fresh ten-month low earlier in the session. 

The USD/JPY pair inched up 0.09% to 102.81.

TheAUD/USD pair inched down 0.05% to 0.7755 and the NZD/USD pair inched down 0.01% to 0.7251.

Gold Price Analysis: XAU/USD eyes $1942 as the next upside target – Confluence Detector

Kicking-off 2021 on a positive note, gold (XAU/USD) is holding onto weekly highs well above $1900, as the beleaguered US dollar continues to lick its wounds from 2020. Concerns over the coronavirus contagion and the likely tightening of restrictions globally boost the safe-haven appeal of gold.

Further, gold also benefits from caution ahead of the runoff Senate elections in Georgia, as traders brace for choppy trading ahead of the key US NFP release in the first full week of 2021. How is gold positioned on the charts? 

USD/JPY struggles near multi-week lows, just below 103.00 mark

• Sustained USD selling bias failed to assist USD/JPY to preserve its early modest gains.
• The risk-on mood undermined the safe-haven JPY and helped limit losses for the pair.
• The set-up favour of bearish traders and support prospects for further near-term losses.

The USD/JPY pair languished near the lower end of its daily trading range, with bears awaiting some follow-through selling below the 103.00 mark.

The pair failed to capitalize on its Asian session uptick, instead met with some fresh supply near the 103.30 region and dropped to near three-week lows on the first trading day of 2021. The intraday pullback of around 30-35 pips was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

The likelihood of additional US financial aid package and expectations that the Fed will keep interest rates lower for a longer period kept the USD depressed through the first half of the trading action on Monday. However, a combination of factors weighed on the Japanese yen and extended some support to the USD/JPY pair.

ASX 200, Hang Seng Weekly Open: Rally May Pause as Pandemic Worsens

S&P 500, ASX, 200, HANG SENG, ASIA-PACIFIC MARKET OUTLOOK:

• US equity indices closed at all-time highs, but the rally may take a pause on virus concerns
• ASX 200, Hang Seng and S&P 500 futures are mixed in view of viral resurgence and lockdowns
• Stimulus money, speculation and return of traders propelled cryptocurrencies, Bitcoin topped $33k

 Pandemic, PMIs, Bitcoin, Asia-Pacific Stocks Weekly Outlook:

Asia-Pacific markets may kick off the week with a mixed tone after all three major US indices finished the year at their record highs thanks to the Covid-19 vaccine rollout, the US stimulus package, as well as seemingly broad consensus that central banks will largely stay accommodative as the pandemic worsens.

Dollar on Borrowed Time as U.S. Twin Deficits Balloon

 By Wayne Cole

SYDNEY (Reuters) - The dollar was ending 2020 in a downward spiral on Thursday with investors wagering a global economic recovery will suck money into riskier assets even as the U.S. has to borrow ever more to fund its swelling twin deficits.

The euro stood at $1.2291, having hit its highest since April 2018 with a gain of almost 10% for the year. The next stops for the bull train are $1.2413 and $1.2476, on the way to the 2018 peak at $1.2555.

The dollar was lying at 103.15 yen, but managed to hold above the December low of 102.86.

Euro Beats Yen, Sterling as Brexit, U.S. Stimulus Boost Risk Appetite

By Karen Brettell

NEW YORK (Reuters) -The euro was boosted on Monday as risk sentiment improved in the wake of Britain's trade deal with the European Union and U.S. President Donald Trump's decision to approve a new fiscal stimulus package.

Britain on Thursday clinched a narrow Brexit trade deal with the EU, just seven days before it exits one of the world's biggest trading blocs in its most significant global shift since the loss of its empire.

"What we are seeing is a continuation of the pricing out of hard Brexit risk," said Ulrich Leuchtmann, head of FX research at Commerzbank (DE:CBKG) in Frankfurt.

Dollar languishes amid pandemic aid optimism, pound meanders

By Kevin Buckland

TOKYO (Reuters) - The dollar languished near a 2-1/2-year low on Tuesday with demand for safe-havens flagging as U.S. lawmakers pushed forward with a COVID-19 relief package.

The House of Representatives voted on Monday to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote.

Last week's Brexit agreement, while bare bones, also supported the outlook for global growth, lifting Asian stocks on Tuesday following Wall Street gains.

"Optimism abounds, and it’s generally coming from equity markets," said Bart Wakabayashi, Tokyo Branch manager of State Street (NYSE:STT) Bank and Trust.

"The dollar is very heavy, and that will continue into next year."

The dollar index was little changed at 90.194 in holiday-thinned trading, hovering near the 89.723 level reached on Dec. 17 for the first time since April 2018.

Short positions on the dollar swelled in the week ended Dec. 21 to $26.6 billion, the highest in three months, according to Reuters' calculations based on data released by the Commodity Futures Trading Commission on Monday.

The euro rose 0.1% to $1.22260 early in the Asian session, hovering near the 2-1/2-year high of 1.22735 touched earlier this month.

The dollar bought 103.740 yen, another haven asset.

Sterling rose 0.1% to $1.3477 following a two-day decline. It was as high as $1.3625 this month, a level not seen since May 2018.

Investors have taken profits in the UK currency following the confirmation last week of a Brexit trade deal that was widely expected.

While the agreement came as a relief to investors, the pact leaves Britain far more detached from the EU, analysts say.

"People are still trying to figure out what this Brexit agreement means," weighing on the pound, said State Street's Wakabayashi.

"Nothing has really been agreed on financial markets, and that’s a big negative for the UK."

Bitcoin slipped 0.8% to $26,841, continuing its retreat from the all-time high of $28,377.94 set Sunday.