© Reuters. FILE PHOTO: US dollar bills are shown in this image
By Kevin Buckland
TOKYO (Reuters) – The dollar traded near a 2 1/2-year low against major peers on Tuesday as demand for the safest assets marked amid progress toward a U.S. fiscal stimulus deal and optimism for a Brexit deal.
The dollar has been virtually weakest since mid-2018 against the euro and British pound, with U.S. lawmakers rushing to process $ 1.4 trillion in spending.
A $ 908 billion COVID-19 relief plan for two-party plans will be split into two packages, a person informed of the matter said, hoping that at least a large part of the plan, which already has bipartisan support, will be approved.
“The big picture is that 2021 looks more and more promising for global growth, and while the U.S. will certainly be a part of that, global reflective trade will support risky currencies like the Australian dollar,” said Westpac currency analyst Sean Callow.
“The dollar is likely to be in the group of latecomers, along with similar yen.”
Across the Atlantic, European Union Brexit negotiator Michel Barnier said it was still possible to seal a trade pact with Britain, sowing hope that an agreement could be reached in just a few days to avoid a turbulent exit for the UK from the trade bloc at the end of the month.
The British pound rose 0.1% against the dollar to $ 1.3332, after jumping 0.8% on Monday. It reached a 2 1/2-year high of $ 1.3540 earlier this month.
The dollar slipped 0.1% to $ 1.2150 per euro, trading near a 2 1/2-year low of $ 1,2177 touched again on Monday.
COVID-19 vaccine launches in the U.S. and the UK have also strengthened risk, but optimism has been mitigated by spikes in infection and death rates. London will make a stricter blockade amid the discovery of a new variant of the virus.
The little changed at 90,705 after Monday sank to 90,419, a level not seen since April 2018.
The currency added 0.1% to 104,125 yen, another traditional safe haven.
“With the launch of vaccines starting in the US and the UK, we expect stops to be reduced in frequency and intensity, allowing USD to resume its downward trend,” said Joe Capurso, Commonwealth Bank of Australia (OTC 🙂 analyst. customer note.
A fiscal stimulus deal would also “undermine” the U.S. dollar, he wrote.
The foreign Chinese yuan weakened 0.2% to 6.5444 per dollar. It reached 6.4975 earlier this month for the first time since June 2018.
The traded at 6.5549.
A Chinese official said on Tuesday that the country could make targeted policy adjustments as the economy improves.
The decreased 0.2% to 75,130 U.S. cents after hitting the highest since June 2018 at 75,780 on Monday.
The New Zealand dollar lost 0.1% to 70.72 US cents after the first time since April 2018 to 71.20 the previous session.
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