Dollar Slips as Vaccine Optimism Saps Haven Demand


The dollar slipped in Asia on Wednesday as signs of progress in beating back the COVID19 pandemic sapped demand for the safest assets, while the pound was on tenterhooks ahead of a leaders meeting to try and salvage a Brexit trade deal.

The U.S. currency declined against most of its major peers as Britain began mass vaccinations and the U.S. edged closer to more fiscal stimulus. It slipped about 0.4 against the risksensitive Aussie and fell to a 212 year low against the yuan.

Sterling steadied above recent lows before a Wednesday dinner between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen in Brussels that is seen as a last roll of the dice for a Brexit trade deal.

Against a basket of currencies, the dollar was 0.1 lower at 90.816, less than half a percent above a twoandahalfyear trough it hit on Friday.

It slipped about 0.2 against the euro to 1.2126 and 0.3 and is tracking toward an annual loss of more than 7.5 against the common currency, its largest since 2017, as investors figure on low rates keeping it under pressure for a while yet.

The dollar dropped to 6.4975 yuan in offshore trade and 6.5229 onshore, which puts the yuan up by more than 10 from its May lows, boosted by the softer dollar and steady inflows into Chinese stocks and bonds.

We expect dollar weakness and the risk positivity to continue into next year, said Craig Chan, head of global FX strategy at Nomura, on an outlook call with journalists.


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