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The dollar fell against major counterparts today, Thursday, as demand for safe-haven currencies was undermined by optimism that a sweeping stimulus package pumped out by the new US administration will boost growth.
Commodity-linked currencies received support, as Asian stocks followed their US counterpart to record highs after Joe Biden was sworn in as president. Biden announced an assistance package to mitigate the impact of the Corona pandemic, worth $ 1.9 trillion.
“Risk sentiment is very positive now, and we expect it to remain so this year, as growth is expected to accelerate very sharply,” said Shinichiro Kaduta, senior currency analyst at Barclays Capital in Tokyo.
He added that the Canadian dollar and Norwegian krone would likely outperform the rest of the market, while European currencies would lag behind.
He said the US currency is expected to rise this year against the euro, with the US recovering faster than most other countries.
The dollar index fell 0.2% to 90.268 points, down for a third day since hitting a one-month high of 90.956 on Monday.
The US dollar fell 0.2% to 1.2611 Canadian dollars in Asia, only to fall for a third day. It hit a three-year low of 1.2607 Canadian dollars overnight after the Bank of Canada chose not to cut interest rates.
The dollar fell 0.4 percent to 8,456 Norwegian kroner, which is also the third day of decline.
The Australian dollar rose 0.4 percent to 77.74 US cents, adding to a 0.7 percent rise in the previous session. Data released Thursday showed Australia saw another strong hiring increase in December.
The dollar was down 0.2 percent to 103.59 Japanese yen, another safe haven currency, today after falling to a two-week low of 103.33.
The euro gained 0.2%, reversing a similar decline seen in the previous session, to trade at $ 1.2135.
Source: Reuters
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