FOREX-Dollar weakens as market optimism lifts riskier currencies

By Kitco News / February 15, 2021 / www.kitco.com / Article Link


* Graphic: World FX rates (Updates prices, adds dollar positioning data)By Iain WithersLONDON, Feb 15 (Reuters) - The U.S. dollar held neartwo-week lows on Monday, as optimism about COVID-19 vaccinerollouts and a planned $1.9 trillion U.S. stimulus packageoffered a boost to riskier currencies, stock markets andcommodity prices.


Among the gainers versus the weaker dollar, the Britishpound broke $1.39 for the first time in nearly three years , helped by expectations that the success of the UK'sCOVID-19 vaccination programme could enable the economy to openup and rebound.


The offshore-traded Chinese yuan continued its recent riseand was on the cusp of breaking above 6.39 per dollar for thefirst time since June 2018 .Commodity currencies strengthened too, with the SouthAfrican rand touching a one-year high . TheNorwegian crown and the Australian dollar reached their highestlevels in three weeks against the greenback.


Many financial markets in Asia remained closed on Monday forLunar New Year, and U.S. stock markets were shut for PresidentsDay.The dollar index slipped 0.1%, to close to lastweek's low of 90.249 - a level unseen since Jan. 27.


Analysts at MUFG said the dollar could weaken further ifmarket optimism held.


"We believe there is plenty yet to go in the so-called'reflation trade' with market participants under-estimating thewillingness of global policymakers to let the economy run hotand fuel stronger-than-expected global growth through theremainder of the year," the analysts said in a note.Speculators maintained their short dollar positions, latestdata from the U.S. Commodity Futures Trading Commission showed,with net short value standing at $29.53 billion. The Japanese yen, viewed as a safe-haven asset, slipped 0.4%against the greenback to 105.27 yen ,


The euro edged 0.1% higher to $1.21310, extendinglast week's 0.6% advance.Bitcoin remained volatile, retreating to as lowas $45,914.75 a day after reaching a record high $49,714.66.The world's most popular cryptocurrency rallied 25% lastweek, boosted by endorsements from Tesla and BNY Mellon .<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Iain Withers, additional reporting by Sujata Rao;editing by Kirsten Donovan, Larry King and Susan Fenton)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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