· Dollar on shaky ground as investors shift to riskier assets
The dollar nursed losses on Wednesday as progress in developing a novel coronavirus vaccine and expectations for a fiscal boost from a new U.S. government triggered a shift of funds from the greenback to riskier assets.
Bitcoin, a cryptocurrency known for its volatile price swings, also traded near an all-time high, in a further sign that investors are growing more comfortable taking on riskier positions.
The U.S. dollar’s declines are likely to continue because a vaccine and the expected choice of former Federal Reserve Chair Janet Yellen as U.S. President-elect Joe Biden’s next Treasury secretary relieve two big uncertainties for investors.
The dollar index, pitting the dollar against a basket of six major currencies was at 92.129 after falling 0.4% on Tuesday.
The dollar stood at $1.1901 against the euro on Wednesday in Asia, close to a two-week low.
The British pound bought $1.3363, close to the highest in more than two months.
Against the yen, the dollar held steady at 104.48.
Research suggesting that a Covid-19 vaccine could be available before year end has sent U.S. stocks surging to record highs and reduced the appeal of holding the dollar as a safe-harbor currency.
· Bitcoin could be on track to $74,000, trader says as cryptocurrency approaches all-time highs
Bitcoin’s boom may just be beginning.
The cryptocurrency’s comeback could go exponential next year, two traders said Tuesday after bitcoin broke above $19,000 and rallied nearly 3.5%, closing in on its 2017 record highs.
Bitcoin is up over 166% year to date, buoyed by bullish sentiment tied in part to fintech companies including PayPal and Square getting into crypto.
“It’s hard to give bitcoin an intrinsic fundamental value because there’s pretty much a finite supply,” Todd Gordon, founder of TradingAnalysis.com, told CNBC’s “Trading Nation” on Tuesday.
To try and see where the trade could be headed, Gordon used a concept known as the Elliott wave theory.
“It’s a wonderful way to value crypto because Elliott wave is meant to detect the herding mentality and the emotions driving the price — fear and greed — and it creates very recognizable patterns,” he said, turning to a chart of bitcoin
“The Elliott wave theory is based on the idea that there’s five waves in a primary trend, three [up]trends and two intervening corrections,” Gordon said.
Seeing as the first wave was a roughly 658% rally, Gordon’s target was a lofty one.
“The Elliott wave goes very well with … Fibonacci multiples. If it does want to fall short, it can go to 61% of that target, which is only at 34,000 at 74,000.“
· Trump’s tariffs could give Biden ‘leverage’ over China, former White House trade negotiator says
President Donald Trump’s trade tariffs have created “leverage” that the incoming Biden administration could use to get the outcomes it wants on the international stage, said former top White House trade negotiator Clete Willems.
Trump slapped elevated tariffs on major trading partners such as China, Canada and the European Union for what he said were unfair practices that disadvantaged American companies. His moves raised tensions between the U.S. and other countries, as well as triggered a trade war with China that weighed down the global economy.
Several trade experts have said that President-elect Joe Biden will likely favor working with allies over slapping punitive tariffs to settle international disputes. But some experts have said Biden may not remove tariffs that Trump has imposed.
“Whether you love the tariffs or hate the tariffs, they have created leverage for United States. (The) United States has raised important questions about the multilateral system, and I hope that this (Biden) administration would use that leverage to get outcomes,” Willems told CNBC’s “Street Signs Asia” on Wednesday.
“At the same time, I do think an approach of working more with allies and partners is important and I do hope that they prioritize that perhaps a little bit more than the Trump administration has,” he added.
· Biden’s pick for foreign policy head affirms a push to get allies on board with U.S. policy on China
Biden announced he intends to nominate Antony Blinken as secretary of State.
“What Blinken has done throughout his career (is he) has built relationships with U.S. allies,” Isaac Stone Fish, a senior fellow at the Asia Society, said in a phone interview. “One of the things that this picking signifies is that Biden will almost certainly make good his promise to re-engage U.S. allies.”
· Louisiana Governor John Bel Edwards adds new COVID-19 restrictions as infection spikes
Gov. John Bel Edwards is imposing more COVID-19 restrictions as the infection spikes for the third time in the state, reducing capacity at most businesses and restaurants to 50% with even more limitations on bars.
"We're in for a rough patch," Edwards said when announcing a new month-long order during a Tuesday press conference. "We have to have more adherence to the mitigation measures."
The new order becomes effective Wednesday, the day before Thanksgiving, as doctors and health care professionals warn the current trend could eventually threaten hospital capacity if it's not reversed. It replaces an existing order than wasn't set to expire until Dec. 4.
· Airlines to record $157bn losses in 2020, 2021 - IATA
The International Air Transport Association (IATA) warned of $157 billion losses expected to be witnessed by airlines in 2020 and 2021 due to the coronavirus (COVID-19) pandemic and lockdown.
This forecast has lowered IATA's industry outlook in June of more than $100 billion losses this year and next year, according to a recent press release.
The association referred that airlines are predicted to lose $118.5 billion in 2020 and $38.7 billion in 2021.
However, airlines will witness improvements during the second half (H2) of 2021 after being negatively affected by COVID-19 in 2020 and the first half (H1) of 2021.
· Brexit could affect economy for longer than COVID: BoE's Saunders
Bank of England interest-rate setter Michael Saunders said the long-term effects of Brexit could have a bigger impact on companies than the coronavirus pandemic.
“Businesses will shake off the effect of COVID-19 as they’re temporary, but the long-term effects of Brexit could be more permanent,” Saunders said in an interview with TheBusinessDesk.com website.
· England to cut travel quarantines to 5 days with tests
Just in time for holiday travelers, England is cutting the two-week quarantine facing people arriving from regions not on Britain's coronavirus safe list reducing it to as little as five days if they test negative for COVID-19.
The change to the quarantine rules, which was announced Tuesday and takes effect on Dec. 15, has been long-awaited by the travel industry, one of the worst-hit sectors during the pandemic. The change will bring the rules governing quarantines in England more in line with other European countries, including Germany.
· Hong Kong leader Carrie Lam vows closer ties with Beijing in key speech
Hong Kong Chief Executive Carrie Lam vowed to continue strengthening ties with China, using an annual policy address to defend Beijing’s tightening grip over the financial hub and announce new steps to boost economic links with the mainland.
In a speech on Wednesday that was delayed in order for her to consult Communist Party leaders in Beijing, Lam said her administration’s aim was to restore confidence following another tumultuous year. She spoke against the backdrop of a new wave of virus infections, an economy in deep contraction, worsening wealth inequality and political turmoil.
· Tokyo governor asks bars, restaurants to shut early amid COVID-19 spike
· India will likely go for bilateral trade pacts for now — not mega deals like RCEP
India is unlikely to join the world’s largest free trade bloc anytime soon as New Delhi remains more inclined toward bilateral agreements, an economist told CNBC.
· Oil prices rise as vaccine optimism sustains rally despite stockpile gain
Oil rose for the fourth straight session on Wednesday as the market shrugged off an industry report showing U.S. crude stockpiles rose more than expected, extending a rally driven by hopes that a COVID-19 vaccine will boost fuel demand.
Brent crude was up 38 cents, or 0.8%, at $48.24 a barrel by 0616 GMT, having risen almost 4% in the previous session. West Texas Intermediate crude gained 27 cents, or 0.6%, to $45.18, after rising more than 4% on Tuesday.
Both contracts are at their highest since early March and have rallied around 9% in the last four days.
Reference: CNBC, Reuters
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