Dollar gains as investors seek safe havens
Investors flocked to safe haven assets amid concerns about a new highly contagious coronavirus strain found in the UK. Additional serious lockdown and travel restrictions were implemented across Europe. The US government reached a $900B stimulus deal regarded as a “down payment” on further funding by President-elect Biden.
Monday: Eurozone consumer confidence, Chicago Fed Nat Activity Index
Tuesday: UK GDP, US GDP
Wednesday: US Initial jobless Claims, U of Michigan Sentiment, New Home Sales
Thursday: Japan Jobless Rate
December 21, 2020
EUR/USD 1.2217 GBP/USD 1.3324 USD/CAD 1.2863 AUD/USD 0.7538 USD/JPY 103.49 USD/CNH 6.5347 USD/ILS 3.2469 USD/MXN 20.1918 USD/CHF 0.8862 USD/INR 73.78
USDThe dollar won versus all G-10 peers, rallying 0.7% as Covid cases surge in Europe. US lawmakers have reached a deal on a $900B fiscal stimulus package. The package includes $600 payments to most adults, and 3 months of extended unemployment benefits.GBP
The pound fell 2% versus the dollar – the largest daily decline since March - after a soft Brexit deadline was missed yesterday and the UK’s biggest port stopped all traffic heading to the EU. A Government source has reported that it is unlikely a deal will be reached unless there is a “substantial shift” in stance from Brussels.EUREuropean officials are set to discuss a coordinated response to the new strain of Covid-19 discovered in the UK. The euro sunk vs. the dollar as investors seek safe haven cover.CADThe Canadian dollar fell along with equities and other G-10s on safe haven demand. PM Justin Trudeau suspended flights between the UK and Canada effective last night.ASIA/PACIFIC
Emerging market currencies declined as a rise in Covid-19 infections capped risk appetite.
The Japanese yen held up versus the dollar, giving up net 0.2% after paring a 0.6% gain to 103.89.
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