TOKYO, Nov 27 — The dollar held steady in thin trade today but was on track for weekly losses against a basket of major currencies as it remained under pressure on improving risk appetite.
US markets were closed for the Thanksgiving holiday yesterday.
“Today will be another quiet day, with almost no catalyst to move the market. The dollar, however, is broadly pressured on month-end selling,” said Shinichiro Kadota, senior strategist at Barclays.
The US dollar index was steady at 92.03 against a basket of major currencies, treading water around a near three-month low of 91.84 it hit overnight.
The dollar has been under pressure this week, as riskier currencies benefited from increased optimism over a string of Covid-19 vaccines news reports and hopes for a more stable period in US politics.
While the greenback will remain under pressure in near term due to prolonged “risk-on” sentiment led by vaccine hopes, Barclay’s Kadota said the market expects the currency to firm in mid-term.
“When looking at how economies have rebounded in the July quarter, the United States grew and made a strong rebound. In a scenario where vaccines becomes gradually available next year and economies return to normal, the US will probably be one of the most resilient among developed countries. And I think that will create a dollar-favourable environment,” he said.
Dovish messaging from the European Central Bank’s chief economist and the minutes from last month’s meeting provided further confirmation of widely expected stimulus at its December gathering.
The central bank’s minutes from its October meeting showed policymakers agreed they could not afford to seem complacent during the second wave of the coronavirus, opting instead to lay the groundwork for more stimulus.
The ECB’s chief economist Philip Lane had also warned that tolerating “a longer phase of even lower inflation” would hurt consumption and investment as well as cementing expectations for low price growth in the future.
The euro was little changed against the greenback at US$1.1905 , away from a more than two months-high of US$1.1941 it marked yesterday.
Sterling fetched US$1.3349, trading near a three-month high of US$1.3399 it touched yesterday, as market participants look for progress on Brexit talks.
The European Union chief negotiator Michel Barnier will talk today with some of the bloc’s ministers responsible for fisheries to discuss the state of play in the trade discussions with Britain, EU official said.
The Australian dollar firmed at 0.73605, having climbed to a near three-month high of 0.7374 yesterday.
Meanwhile, the Kiwi changed hands at 0.7006 against the greenback.
Bitcoin, the most popular cryptocurrency, last fetched US$17,271.86 in a volatile trade. Overnight, the cryptocurrency plunged as much as 13 per cent to its lowest since November 16, having rallied close to its all-time high of US$19,666. — Reuters
Source: Malay Mail
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