LONDON (Reuters) - The dollar stood near two-week highs on Monday after decent U.S. economic data was released on Friday, while sterling recovered following last week’s big drop.
FILE PHOTO: Euro, Hong Kong dollar, U.S. dollar, Japanese yen, British pound and Chinese 100-yuan banknotes are seen in a picture illustration shot January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo
The euro was little changed below $1.11. With the economic calendar light before the holidays, analysts doubt this week will see significant moves for major currencies.
Data published on Friday showed the U.S. economy, already enjoying a record expansion, appears to have maintained its moderate growth as the year ended, supported by a strong labor market.
The dollar has benefited both during bouts of risk aversion - because it is considered a safe-haven currency - and when markets have rallied, because the U.S. economy is outperforming other parts of the world.
The dollar was unchanged against the euro at $1.1085 EUR=EBS. Against a basket of currencies, it edged 0.1% lower - its index touching 97.611 .DXY - but remained near Friday's peak, the highest since Dec. 6.
Many analysts say the dollar is the most attractive currency of a bad bunch. U.S. yields are falling, but still better than returns elsewhere.
“The big picture remains though that the dollar continues to struggle for direction again the other major currencies amidst record low volatility,” MUFG analysts wrote in a note, pointing to the modest 1.5% rise for the dollar index in 2019.
The dollar has, however, also been supported since Washington and Beijing came to an interim trade agreement earlier this month. China said on Monday it would lower tariffs on products ranging from frozen pork to some type of semiconductors next year.
Currencies linked closely to the prospects for global trade and investors’ general appetite for risk rose.
The Australian dollar, which is closely linked to sentiment towards China, rose 0.1% to $0.6913 AUD=D3. The New Zealand dollar gained 0.2% to $0.6618 NZD=D3.
Sterling suffered its worst week in three years last week after Prime Minister Boris Johnson ruled out extending the transition period for Britain to negotiate a trade deal with the European Union.
Early on Monday it made some gains, rising 0.3% to $1.3024 GBP=D3. Versus the euro, sterling rose 0.2% to 85.11 pence per euro EURGBP=D3.
The euro gained 0.2% versus the Swedish crown to 10.444 crowns EURSEK=D3. The Swedish currency rose to an eight-month high last week before the Riksbank became the first major central bank to end negative interest rates.
Graphic: World FX rates in 2019 here
Reporting by Tommy Reggiori Wilkes, additional reporting by Hideyuki Sano in Tokyo, editing by Larry King
https://www.reuters.com/article/global-forex/forex-dollar-holds-firm-before-holidays-sterling-recovers-slowly-idUSL8N28X14T
2019-12-23 09:11:00Z
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