Dollar capped as U.S. leaders meet on stimulus, pound underpinned by Brexit deal hopes
The dollar languished near 2-1/2-year lows on Wednesday as progress toward a massive U.S. government spending bill and Covid-19 relief measures whetted risk appetite, sapping demand for the safest assets.
Also supporting sentiment, the U.S. expanded its roll-out of a vaccine from Pfizer Inc and German partner BioNTech SE, while another developed by Moderna Inc appeared set for approval this week.
The dollar index, which measures the greenback against a basket of currencies, was last at 90.447, after sinking as low as 90.419 on Monday, a level not seen since April 2018.
With its former support level of 91 now acting as a resistance, the index could head to as low as 88, said State Street’s Wakabayashi. It hit a three-year low of 88.251 in February 2018.
British pound jumps as EU reports more progress on Brexit trade deal
Sterling broke through the long-awaited $1.35 barrier on Wednesday morning after European Commission President Ursula von der Leyen said progress had been made toward a post-Brexit trade deal between the U.K. and the European Union.
Addressing the European Parliament, von der Leyen said that while she could not say whether there would or would not be a deal, “there is a path to an agreement now” and the next few days will be critical.
“We have found a way forward on most issues but two issues remain outstanding: the level playing field and fisheries,” von der Leyen said, according to Reuters.
“I am glad to report that the issues linked to governance now have largely been resolved. The next few days are going to be decisive.”
Sterling climbed 0.4% against the dollar following the remarks, breaking above the $1.35 barrier, and the euro also gained 0.4% against the greenback to hover just below $1.22.
Bitcoin breaks above $20,000 for the first time ever
Bitcoin breached the $20,000 level for the first time in history Wednesday, as crypto enthusiasts pointed to increased demand from institutional investors for the red-hot digital currency.
The world’s most-valuable virtual currency traded 5.6% higher to a price of around $20,600, according to market data from Coin Metrics, taking its year-to-date gains to more than 180%.
Reference: CNBC
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