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LONDON, Feb 16 ― The US dollar held near two-week lows yesterday, as optimism about Covid-19 vaccine rollouts and a planned US$1.9 trillion (RM7.6 trillion) US stimulus package offered a boost to riskier currencies, stock markets and commodity prices.
Among the gainers versus the weaker dollar, the British pound broke US$1.39 for the first time in nearly three years , helped by expectations that the success of the UK's Covid-19 vaccination programme could enable the economy to open up and rebound.
The offshore-traded Chinese yuan continued its recent rise and was on the cusp of breaking above 6.39 per dollar for the first time since June 2018.
Commodity currencies strengthened too, with the South African rand touching a one-year high. The Norwegian crown and the Australian dollar reached their highest levels in three weeks against the greenback .
Many financial markets in Asia remained closed yesterday for Lunar New Year, and US stock markets were shut for Presidents Day.
The dollar index slipped 0.1 per cent, to close to last week's low of 90.249 ― a level unseen since January 27.
Analysts at MUFG said the dollar could weaken further if market optimism held.
“We believe there is plenty yet to go in the so-called 'reflation trade' with market participants under-estimating the willingness of global policymakers to let the economy run hot and fuel stronger-than-expected global growth through the remainder of the year,” the analysts said in a note.
Speculators maintained their short dollar positions, latest data from the US Commodity Futures Trading Commission showed, with net short value standing at US$29.53 billion.
The Japanese yen, viewed as a safe-haven asset, slipped 0.4 per cent against the greenback to ¥105.27.
The euro edged 0.1 per cent higher to US$1.21310, extending last week's 0.6 per cent advance.
Bitcoin remained volatile, retreating to as low as US$45,914.75 a day after reaching a record high $49,714.66.
The world's most popular cryptocurrency rallied 25 per cent last week, boosted by endorsements from Tesla and BNY Mellon. ― Reuters
Source: Malay Mail
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