FOREX MARKET

FOREX-Dollar slips in to 2021 as investors ride downtrend – Reuters


    * Dollar softens against most majors
    * Virus worries hold back sterling and lift yen
    * Bitcoin surges to fresh record

    By Tom Westbrook
    SINGAPORE, Jan 4 (Reuters) - The dollar started the new year
more or less where it left off - under pressure from investors
who reckon low U.S. interest rates and an eventual worldwide
recovery from the coronavirus pandemic will make it a laggard
against other major currencies.
    In early Asia trade on Monday, still thinned by holidays,
some short sellers were again adding to bets against the dollar
and unwinding a small bounce it enjoyed on the last trading day
of 2020 when profit-taking lent support.
    The euro rose 0.2% from its New Year's Eve closing
level to $1.2244, while a media report that Japan is considering
a state of emergency for Tokyo pushed up the yen by about 0.3%
to 103.05 per dollar.
    Japan's Fuji TV reported an emergency may be declared for 
as early as this week, as the Japanese capital grapples with
record levels of infection. Prime Minister Yoshihide Suga is due
to hold a news conference to mark the start of 2021 at 0200 GMT.
    That news also unwound what had been small early gains for
the Australian and New Zealand dollars, which fell back to
around steady by 0045 GMT, with the Aussie at $0.7681
and the kiwi at $0.7181.
    Surging coronavirus cases also held back gains in sterling
, which was steady at $1.3669 after British Prime Minister
Boris Johnson said on Sunday tougher lockdown restrictions were
probably on the way as COVID-19.
    Still, the Chinese yuan, which has become a favoured
vehicle for shorting the dollar as China's economy rebounds
impressively, climbed roughly 0.2 to 6.4927 per dollar in
offshore trade, close to testing a 2-1/2 year low.
    Soaring cryptocurrency Bitcoin also extended its
record-smashing rally, and was just below a record high of
$34,800 hit on Sunday. It rose 300% in 2020 and has gained more
than 65% since crossing $20,000 just over two weeks ago.
    The Singapore dollar touched a 32-month high of S$1.3203 per
dollar after data showed Singapore's economy, which is a
bellwether for global trade, contracted slightly less than
expected in the fourth quarter.
    Elsewhere, traders have an eye on Tuesday's runoff vote in
the U.S. state of Georgia, which will determine control of the
Senate and so the fate of President-elect Joe Biden's agenda.
    Voters have not elected a Democrat senator in Georgia in 20
years and if either or both Republican incumbents win, their
party would retain a narrow Senate majority.
    A Democratic sweep could trigger further dollar weakness, as
investors assume it would lead to higher stimulus spending which
would in turn boost market sentiment and weigh on the dollar.
    The dollar posted its largest annual loss since 2017 last
year as, after March's panic subsided, it settled in to a
downtrend that has only drawn more traders to short it.
    Against a basket of currencies the dollar was a
fraction below where it ended 2020 at 89.766.
    Benchmark 10-year U.S. Treasury yields began the
year firmly at 0.9298%. But that is almost 100 basis points
below where they began 2020 and a turn-off for yield-chasers.
    Minutes of the Federal Reserve's December meeting due on
Wednesday should offer more detail about making their forward
policy guidance more explicit and the chance of a further
increase in asset buying this year - another anchor on yields.
 
    ========================================================
    Currency bid prices at 8:50AM in Singapore (0050 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2241        $1.2218     +0.19%         +0.19%      +1.2254     +1.2211
 Dollar/Yen                   103.0150       103.2900    -0.24%         -0.24%      +103.3100   +103.0350
 Euro/Yen                     126.10         126.15      -0.04%         -0.65%      +126.5200   +126.1200
 Dollar/Swiss                 0.8838         0.8847      -0.09%         -0.09%      +0.8842     +0.8829
 Sterling/Dollar              1.3669         1.3662      +0.06%         +0.06%      +1.3682     +1.3645
 Dollar/Canadian              1.2732         1.2734      -0.13%         +0.00%      +1.2735     +1.2723
 Aussie/Dollar                0.7684         0.7693      -0.12%         -0.12%      +0.7714     +0.7682
 NZ                           0.7181         0.7181      +0.06%         +0.06%      +0.7199     +0.7185
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 

 (Reporting by Tom Westbrook; Editing by Lincoln Feast.)
  

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