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Dollar Weak; Swedish Crown Falls after Riksbank QE Expansion

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The euro rose to a nearly threemonth high on Thursday as the dollar went on the defensive on downbeat U.S. economic data and optimism about coronavirus vaccines

Investors sought riskier assets tied to global commodities and emerging markets, with the British pound close to a threemonth high against the dollar as traders also awaited details on trade talks between Britain and the European Union this week.

The Swedish crown fell on Thursday, both against the euro and the dollar, after Riksbank expanded its quantitative easing programme.

Pressure mounted on the U.S. currency also after Federal Reserve minutes on Wednesday signalled the central bank is likely to strengthen their quantitative easing program at the next meeting in December.

Although a few Fed policymakers were hesitant to make nearterm changes to the guidance because of the uncertain outlook, many participants judged that the Committee might want to enhance its guidance for asset purchases fairly soon, according to the minutes released Wednesday from the Feds Nov. 45 meeting.

Lee Hardman, currency analyst at MUFG, estimated that the new guidance could see the Fed commit to continue purchasing at least 120 billion per month of securities until it judges that it has made substantial progress towards its goals.

However, the size of the QE programme might not necessarily be increased, Hardman said.

Still, the developments support our view that loose Fed policy will remain a weight on the U.S. dollar next…

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