Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar hits two-and-a-half-year low on risk-on trades, shares buoyant

EconomyDec 04, 2020 07:45AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. A man wearing a protective face mask walks past a stock quotation board outside a brokerage, amid the coronavirus disease (COVID-19) outbreak, in Tokyo 2/2

By Carolyn Cohn

LONDON (Reuters) - Growing prospects for a U.S. economic stimulus package and the roll-out of COVID-19 vaccines boosted demand for riskier assets on Friday, taking the safe-haven dollar to a 2-1/2-year low versus the euro and world shares towards record highs.

A bipartisan, $908 billion coronavirus aid plan gained momentum in the U.S. Congress on Thursday as conservative lawmakers expressed their support.

The U.S. Federal Reserve is also expected to tweak guidance on its asset-purchase scheme later this month. The European Central Bank looks certain to increase its bond buying next week.

"We expect major central banks to remain very accommodative over the coming quarters as output remains below its pre-crisis level - and well below its pre-crisis trend - and inflation

remains subdued," Elia Lattuga, co-head of strategy research at Unicredit (MI:CRDI), said in a note.

Britain hopes that millions of doses of the Pfizer/BioNTech COVID-19 vaccine will be delivered by the end of the year but the total will depend on how quickly it can be manufactured, business minister Alok Sharma said.

Britain approved Pfizer Inc (NYSE:PFE)'s COVID-19 vaccine on Wednesday, jumping ahead of the rest of the world in the race to begin the mass inoculation programme.

MSCI's world share index ticked up 0.17% to within a whisker of the previous day's record high. It is set for a fifth straight week of gains, which have seen it surge 15%.

S&P500 futures rose 0.3% ahead of U.S. non-farm payrolls data at 1330 GMT, forecast to show a rise of 469,000 in November, according to a Reuters poll.

The broadly upbeat mood saw the U.S. dollar lose ground to other major currencies.

"One of the elements of the better news we are getting, for instance the vaccine, is to increase the attraction of risky assets and that reduces the appetite for the U.S. dollar," said Eric Brard, head of fixed income at asset manager Amundi.

The euro hit its highest since April 2018 against the dollar and was last at $1.2172, a weekly gain of more than 1.5%. The dollar was down 0.13% against a basket of currencies, near its lowest since May 2018.

Britain's FTSE 100 index reached nine-month highs and euro zone stocks were close to similar levels.

German government bond yields - which move inversely to price - ticked down to -0.557%.

German industrial orders rose more than expected on the month in October, data showed on Friday, raising hopes the manufacturing sector in Europe's biggest economy started the fourth quarter on a solid footing during a second wave of the COVID-19 pandemic.

Asian shares hit a record high overnight. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.82%, surpassing its Nov. 25 high, led by gains in the tech sector. Japan's Nikkei dipped 0.22% on profit-taking.

BREXIT DEAL?

The pound rose 0.2% to $1.3475, a shade below recent one-year highs, with traders hoping for a trade deal between the European Union and Britain.

Michel Barnier, the EU's chief negotiator, said it was an important day in the talks as he left his hotel in London, while his planned update for national envoys to the bloc was cancelled due to "intensive negotiations", an EU spokesman said.

A negotiated deal was "imminent" and expected before the end of the weekend, barring a last-minute breakdown in talks, an official with the bloc told Reuters. But a British minister said the talks were in a difficult phase.

Emerging markets continued their gains. The Mexican peso, Brazilian real, Turkish lira, South African rand, Russian rouble and Polish zloty have all jumped 7% to 11% over the past month, adding to 5%-12% leaps in China, Taiwan and Korea's currencies since June.

Oil prices got an additional lift after OPEC and Russia agreed to reduce their deep oil output cuts from January by 500,000 barrels per day. They failed to find a compromise on a broader and longer-term policy.

The increase means the Organization of the Petroleum Exporting Countries and Russia, a group known as OPEC+, would move to cut production by 7.2 million barrels per day, or 7% of global demand from January, compared with current cuts of 7.7 million barrels per day.

Brent crude rose as high as $49.92 per barrel, its highest price since early March, and last stood at $49.36, up 1.3%.

Dollar hits two-and-a-half-year low on risk-on trades, shares buoyant
 

Related Articles

GM extends EV Bolt production halt to mid-October
GM extends EV Bolt production halt to mid-October By Reuters - Sep 16, 2021

By David Shepardson WASHINGTON (Reuters) -General Motors Co said on Thursday it will extend a shutdown of a Michigan assembly plant to mid-October following a new recall of its...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (7)
Samui Lo
Samui Lo Dec 04, 2020 2:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
But why do we need a stimulus when the markets seem to think the forward eonomy is going to do so great anyway?
Alex Marinov
Alex Marinov Dec 04, 2020 2:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What do Asian stocks have to do with US unemployment benefits?
Johnny Crash
Johnny Crash Dec 04, 2020 12:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The bubble has never in history been bigger than today
John Smit
John Smit Dec 03, 2020 11:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Virus hype is going to fall flat on it's face.
Pradeep Kannaiah
Pradeep Kannaiah Dec 03, 2020 11:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Flip story every 2 mins
Jesse Mulliniks
Jesse Mulliniks Dec 03, 2020 9:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Trump is going to stay in office and market will crash
Carlos GA
Carlos GA Dec 03, 2020 9:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
biden will solve every problem in America...poor brainwashed guy...
Tom Pym
Tom Pym Dec 03, 2020 9:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Carlos GA  Trump has solved every imaginary problem we faced...like water shortages from flushing the toilet too much, MAGA!
Chad Selzler
Chad Selzler Dec 03, 2020 9:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Carlos, open your eyes and do some research.
Shouvik Chak
Shouvik Chak Dec 03, 2020 9:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
TTM, We are going tonyhe Moon Baby!
Ronald Warren
Ronald Warren Dec 03, 2020 8:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We're past anything to keep markets moving up. All hocus pocus. Vix has a trigger finger now and keeps running up randomly. Algos are expecting something.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email