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Dollar falls to fresh 2-1/2-year low on U.S. stimulus bets

The safe-haven dollar sank to a fresh 2-1/2-year low in choppy trading on Wednesday, pressured once again by expectations of further fiscal stimulus for the United States.

The dollar, however, last traded little changed on the day amid wrangling in Congress over additional coronavirus aid.

U.S. Senate Democratic Leader Chuck Schumer on Wednesday rejected the latest Republican coronavirus aid plan. He described it as an “inadequate, partisan proposal” that would help shield businesses from liability lawsuits but fail to help workers hurt by the pandemic.

In midday trading, the dollar index, which measures the greenback against a basket of major currencies, was flat to slightly lower at 91.146, after hitting 91.100 overnight, the lowest level since late April 2018.

Wednesday’s data showing slower U.S. private hiring last month supported some safe-haven buying of the dollar earlier in the session.

Private payrolls increased by 307,000 jobs in November, the ADP National Employment Report showed, lower than economists’ forecast for a 410,000 rise in new jobs. Data for October, though, was revised up to show 404,000 jobs added instead of the initially reported 365,000.

The euro, meanwhile, was up 0.2% at $1.2094, after earlier hitting $1.2108, the highest since late April 2018.

 

The European Central Bank meets next week and analysts said the ECB could act to stem the euro’s rapid rise.

 

Against the yen, the dollar rose 0.2% to 104.47, after the Bank of Japan signaled its readiness to extend pandemic-response programs.

 

Bitcoin was up 1% at $18,978 , after hitting a record high of $19,918.01 on Tuesday.

 

Sterling fell as Britain and the European Union quickly approached a make-or-break moment in trade talks, with many investors doubting a deal will be reached.

 

The pound last traded down 0.5% against the dollar at $1.3361.

 

10-year Treasury yield rises to 0.95% as investors monitor progress on a stimulus deal

U.S. Treasury yields rose slightly on Wednesday as lawmakers seek to find a clear path toward a new stimulus deal.

The yield on the benchmark 10-year Treasury note gained 1 basis point to 0.95%, while the yield on the 30-year Treasury bond rose 2 basis points to 1.70%. Yields move inversely to prices.

Reference: CNBC