FOREX-Dollar friendless as bears pile in, poised for worst week in a month

  • Reuters
  • Forex News
FOREX-Dollar friendless as bears pile in, poised for worst week in a month
Credit: © Reuters.

* Dollar falls through major support vs JPY; sinks broadly

* NOK leaps on rate hike prospects

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook

SINGAPORE, Dec 18 (Reuters) - The dollar has sunk through major support levels and looked set for its worst week in a month on Friday, as its accelerating slide sucked in more short sellers keen to make an easy buck.

It has slumped to a nine-month low against the safe-haven yen, even though investors have been gobbling up risky assets all week, and fallen to multi-year lows against the euro, pound, Aussie , kiwi and Canadian dollar. MKTS/GLOB

The euro EUR= has added nearly 3% in the three weeks since it burst through stiff resistance at $1.2000. At $1.2254, after minor profit taking on Friday, there is clear sky ahead until the common currency's 2018 top of $1.2556.

The Australian dollar AUD=D3 , which also saw some small profit taking, is set for a seventh consecutive weekly gain, a streak that has carried it 9% higher since early November.

"It's a perfect combination that is besieging the dollar at the moment," said Rodrigo Catril, National Australia Bank's senior currency strategist in Sydney, since U.S. rates are anchored low and better returns are expected elsewhere.

"For now the narrative of global growth, and broadening of the recovery, favours risk-sensitive currencies like the Aussie and the kiwi, and more of the same is to be expected in 2021."

The New Zealand dollar NZD=D3 , popped to a two-and-a-half year high of $0.7170 Thursday after better-than-expected national growth data, and has gained for eight weeks straight - its longest run of weekly rises in three years. NZD/

Against a basket of currencies =USD the dollar languished at 89.862 on Friday, just above a 2-1/2-year low hit on Thursday. The dollar index is down 1.2% for the week so far and has fallen 12.7% from a three-year peak in March.

The greenback last traded at 103.28 yen JPY= after falling as far as 102.88 yen overnight.

Short positions in the dollar stood not far below nine-year highs last week and news in recent days of vaccine rollouts, progress in Brexit trade talks and U.S. stimulus negotiations has only strengthened dollar bears' resolve. 0#NETUSDFX=

"If we get a U.S. fiscal deal and a Brexit deal before Christmas, there will be nothing stopping kiwi," ANZ analysts said in a note on Friday.

Britain and the European Union struck a downbeat tone about the likelihood of an agreement on Thursday, but investors are betting that is yet more brinkmanship and the pound GBP= sat comfortably at $1.3554 after hitting a 31-month high overnight.

Elsewhere the Norwegian crown NOK= zoomed 1.4% higher on Thursday after Norway's central bank said a vaccine-driven recovery could prompt rate hikes early in 2022 or sooner - a move U.S. policymakers are not even beginning to consider yet. Bank of Japan ends its two-day policy meeting on Friday and is expected to leave rates steady but announce an extension of a package of steps aimed at easing corporate funding strains. German sentiment survey and U.S. consumer sentiment data are also due later on Friday.

========================================================

Currency bid prices at 9:16AM in Singapore (116110 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.2255

$1.2270

-0.12%

+9.31%

+1.2274

+1.2251 Dollar/Yen

JPY=D3

103.2700

103.0700

+0.17%

-4.94%

+103.2850 +103.1300 Euro/Yen

EURJPY=

126.55

126.46

+0.07%

+3.77%

+126.5600 +126.4300 Dollar/Swiss

CHF=EBS

0.8850

0.8840

+0.11%

-8.54%

+0.8853

+0.8848 Sterling/Dollar GBP=D3

1.3554

1.3586

-0.20%

+2.23%

+1.3590

+1.3556 Dollar/Canadian CAD=D3

1.2734

1.2720

+0.12%

-1.97%

+1.2741

+1.2717 Aussie/Dollar

AUD=D3

0.7616

0.7627

-0.16%

+8.53%

+0.7628

+0.7611 NZ

NZD=D3

0.7150

0.7155

-0.11%

+6.21%

+0.7151

+0.7146 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100