FOREX

FOREX-U.S. dollar gains on concerns about new coronavirus strain – Reuters


    * New coronavirus strain overshadows U.S. stimulus deal
    * U.S. dollar rises to 10-day high
    * Pound drops close to 2% as virus disrupts freight
    * Euro, Aussie, NZ dollar fall as risk-off mode reigns
    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

 (Adds new comment, FX table, updates prices, changes byline, dateline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 21 (Reuters) - The dollar rose to a more than one-week high on Monday in a
holiday-shortened week on fears about a fast-spreading new coronavirus strain that was discovered in the
UK, prompting investors to seek safety in the greenback.
    Sterling fell, as a consequence, to a 10-day low against the dollar and euro, in line with
the yield on two-year British government bonds falling to a record low. Prime Minister Boris Johnson
sought an emergency response to the crisis.
    The pandemic stress in Europe overshadowed a weekend deal among U.S. congressional leaders for a $900
billion coronavirus aid package.
    European stock markets slid, while Wall Street shares sank after most of Europe cut off transport with
the UK, sowing chaos for families and companies just days before Britain completes it exit from the
European Union.
    "The new strain of the coronavirus is really scaring everyone and we're seeing buying of the dollar
across the board.  It's the dollar's best game since March," said Edward Moya, senior market strategist at
OANDA in New York.
    In mid-morning trading, the dollar index gained 0.2% to 90.43, after it sank to two-and-a-half-year
lows last week, driven by optimism that vaccines would help revive global growth. Earlier in the session,
it rose to a two-week high of 91.022. 
    "I think we will still have a Biden administration that will exercise caution and maintain stricter
measures that could limit economic activity," said OANDA's Moya. "We were expecting things to start
getting to normal by the end of the first quarter; I think we will have to push everything back."
    The euro fell 0.4% to $1.2205, after earlier dropping to a 10-day trough as well.
    The pound slumped 1.6% versus the dollar to $1.3303, while the euro gained 1.1% against
sterling to 91.73 pence.
    Unlike the pound, which faces structural challenges when Britain leaves the EU either with a deal or
no deal, the euro's strength isn't expected to suffer structurally, said Holger Schmieding, chief
economist at Berenberg. 
     "It's a temporary setback in a longer trend," he said, referring to the euro's fall on Monday. He
expects the currency to eventually resume its rise towards $1.25. 
    The riskier Australian and New Zealand dollars weakened at the start of the week as investors rushed
for haven assets.
    The Aussie dollar dropped 1.35% to 75.35 U.S. cents, while the New Zealand dollar fell 1.4%
to 70.44 U.S. cents.
    The U.S. dollar gained 0.3% against the yen to 103.57 yen, another safe haven.
    
    ========================================================
    Currency bid prices at 9:58AM (1458 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Dollar index                 90.4110        90.2810     +0.15%         +0.00%      +91.0220    +90.1870
 Euro/Dollar                  $1.2209        $1.2260     -0.41%         +8.90%      +$1.2243    +$1.2130
 Dollar/Yen                   103.5800       103.3200    +0.27%         -4.62%      +103.8850   +103.2950
 Euro/Yen                     126.45         126.61      -0.13%         +3.69%      +126.6300   +125.9200
 Dollar/Swiss                 0.8879         0.8832      +0.54%         -8.24%      +0.8919     +0.8843
 Sterling/Dollar              $1.3302        $1.3528     -1.66%         +0.31%      +$1.3468    +$1.3190
 Dollar/Canadian              1.2864         1.2788      +0.60%         -0.97%      +1.2956     +1.2784
 Aussie/Dollar                $0.7535        $0.7624     -1.15%         +7.40%      +$0.7605    +$0.7463
 Euro/Swiss                   1.0839         1.0821      +0.17%         -0.12%      +1.0841     +1.0799
 Euro/Sterling                0.9174         0.9056      +1.30%         +8.52%      +0.9217     +0.9096
 NZ                           $0.7050        $0.7142     -1.27%         +4.79%      +$0.7122    +$0.7003
 Dollar/Dollar                                                                                  
 Dollar/Norway                8.6645         8.5940      +0.82%         -1.23%      +8.8650     +8.6310
 Euro/Norway                  10.5849        10.5150     +0.66%         +7.49%      +10.7585    +10.5256
 Dollar/Sweden                8.2748         8.2512      -0.13%         -11.47%     +8.4336     +8.2664
 Euro/Sweden                  10.1060        10.1193     -0.13%         -3.47%      +10.2356    +10.0938
 
 (Reporting by Gertrude Chavez-Dreyfuss
Additional reporting by Julien Ponthus in London
Editing by Mark Heinrich)
  

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