* U.S. Dollar Index little changed* Risk-sensitive Australian dollar rises* Lira bounces after historic drop(Updates prices)By Saqib Iqb
* U.S. Dollar Index little changed
* Risk-sensitive Australian dollar rises
* Lira bounces after historic drop
(Updates prices)
By Saqib Iqbal Ahmed
NEW YORK, Dec 21 (Reuters) – The U.S. dollar dipped slightly
on Tuesday as improving risk sentiment boosted riskier
currencies such as the Australian dollar and the British pound.
The U.S. Dollar Currency Index was last at 96.47,
down 0.03% on the day, after slipping as low as 96.336 earlier
in the session. The index, which is up about 7% for the year,
fell 0.1% on Monday as traders sold the greenback to book
profits in the final days of the year.
Risk appetite took a blow on Monday after U.S. Senator Joe
Manchin, a conservative Democrat who is key to President Joe
Biden’s hopes of passing a $1.75-trillion domestic investment
bill – known as Build Back Better – said on Sunday he would not
support the package, prompting a sell-off in global markets.
Surging Omicron coronavirus cases also pushed investors to
look for safe havens such as the Japanese yen and the
Swiss franc < CHF=>.
Stocks rebounded and bond yields rose on Tuesday as
investors looked past the recent setbacks.
“We expect broader range trading will extend over the
holiday period,” Shaun Osborne, chief FX strategist at
Scotiabank, said in a note.
The risk-sensitive Australian dollar bounced on Tuesday,
snapping a two-day weakening streak to trade up 0.60%.
The rebound in global risk appetite also pushed the British
pound up against the dollar and euro, even as British Prime
Minister Boris Johnson cautioned that further lockdown measures
may be needed to tackle the spread of the virus.
Despite the greenback’s lackluster showing this week, the
dollar index is still close to the 16-month high of 96.938 hit
in late November. Investors remain bullish on the outlook for
the greenback, with latest positioning data near the highest
levels in more than two years.
The Federal Reserve’s hawkish statement last week that it
would accelerate the unwind of its asset purchases, paving the
way for three quarter-percentage-point rate increases in 2022 –
is expected to keep the dollar well-supported.
“We continue to anticipate the USD and CAD advancing against
the majors in the new year as investors bank on tighter monetary
policy being introduced by the Fed and Bank of Canada
respectively,” Osborne said.
The slack in Canada’s economy caused by the coronavirus
pandemic has substantially diminished, the governor of the Bank
of Canada said on Wednesday, a key sign the central bank is set
to begin hiking rates soon.
The loonie was up about 0.2% on Tuesday.
In other trading, Turkey’s lira was up about 7%
against the U.S. dollar, extending its historic recovery from
record lows after President Tayyip Erdogan unveiled a plan he
said would guarantee local currency deposits against market
fluctuations.
Bitcoin gained 3.5% to $48,558 after trending
lower for the past few weeks.
========================================================
Currency bid prices at 3:37PM (2037 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 96.4760 96.5170 -0.03% 7.218% +96.6420 +96.3360
Euro/Dollar $1.1280 $1.1274 +0.06% -7.67% +$1.1303 +$1.1261
Dollar/Yen 114.0950 113.6400 +0.49% +10.56% +114.2150 +113.6200
Euro/Yen 128.70 128.11 +0.46% +1.40% +128.7500 +128.0600
Dollar/Swiss 0.9236 0.9214 +0.27% +4.43% +0.9254 +0.9196
Sterling/Dollar $1.3266 $1.3210 +0.44% -2.89% +$1.3268 +$1.3196
Dollar/Canadian 1.2915 1.2944 -0.22% +1.43% +1.2945 +1.2912
Aussie/Dollar $0.7152 $0.7110 +0.60% -7.01% +$0.7156 +$0.7098
Euro/Swiss 1.0419 1.0387 +0.31% -3.59% +1.0427 +1.0388
Euro/Sterling 0.8502 0.8539 -0.43% -4.87% +0.8549 +0.8501
NZ $0.6767 $0.6716 +0.79% -5.74% +$0.6768 +$0.6704
Dollar/Dollar
Dollar/Norway 8.9380 9.0660 -1.35% +4.16% +9.0550 +8.9415
Euro/Norway 10.0858 10.2045 -1.16% -3.65% +10.2178 +10.0790
Dollar/Sweden 9.1272 9.1326 -0.14% +11.36% +9.1678 +9.1115
Euro/Sweden 10.2949 10.3094 -0.14% +2.17% +10.3334 +10.2926
(Reporting by Saqib Iqbal Ahmed; Editing by Dan Grebler and
Nick Zieminski)
www.lse.co.uk