TOKYO, Dec 17 — The US dollar languished near fresh 2½-year lows against its major rivals today as progress toward agreeing a US stimulus package and a Brexit deal boosted risk appetite at the expense of the safest assets.
Congressional negotiators were “closing in on” a US$900 billion (RM3.65 trillion) Covid-19 aid bill, lawmakers and aides said yesterday, with the tone the most positive it's been in months.
Across the Atlantic, the European Union's chief executive said a deal with the UK was nearer, although success wasn't guaranteed.
“As the world gets more optimistic about the outlook for growth in 2021, the US dollar has softened,” said Michael McCarthy, chief strategist at broker CMC Markets in Sydney.
“Further weakening of the dollar is on the cards.”
The euro traded at US$1.21945 early in the Asian day, after reaching US$1.22120 yesterday, the strongest since April 2018.
The pound bought US$1.3500 having risen to US$1.3553 the previous session for the first time since May 2018.
The Federal Reserve yesterday vowed to keep funnelling cash into financial markets until the US economic recovery is secure, a promise of long-term help that fell short of some investors' hopes of an immediate move to shore up a recent pandemic-related slide.
The US dollar index jerked higher after the Fed's announcement, but then sank back towards the day's low of 90.126, a level not seen since April 2018.
The greenback was little changed at 103.475 yen, another safe haven currency.
The Australian dollar was also largely steady at 75.807 US cents, while its New Zealand peer slipped 0.1 per cent to 71.05 US cents.
Bitcoin traded at US$21,342 after smashing through the US$20,000 barrier for the first time overnight, and extending as high as US$21,420 today.
“Bitcoin is still on its latest tear,” Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney, wrote in a client note.
“I still don't want one for Christmas.” — Reuters
