News: FOREX-Dollar on defensive amid weak U.S. data, increase in risk appetite

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    • Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
    • Dollar grinds lower against many currencies
    • Improving risk appetite draws funds from dollar
    • Traders closely monitoring moves in yuan

    The dollar was on the defensive on Thursday as downbeat U.S. economic data and optimism about coronavirus vaccines prompted investors to seek out riskier assets tied to global commodities and emerging markets.

    The British pound traded near a more than two-month high against the dollar as investors awaited details on trade talks between Britain and the European Union this week.

    The dollar's fall has been so rapid that it could rebound in the short term, but some investors still expect a decline over the longer term as they shift positions in anticipation that the coronavirus outbreak will wane next year.

    "A China-led recovery in the global economy and commodities should benefit commodities currencies," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

    "The outlook is good, but we are reaching levels where authorities might feel some concern. Other emerging market currencies with good fundamentals should benefit."

    Against the euro EUR=EBS , the dollar stood at $1.1925, close to its weakest in more than two months.

    Sterling GBP=D3 bought $1.3387, which is near its strongest level since Sept. 2. The pound held steady at 89.06 pence per euro EURGBP=D3 .

    The dollar was little changed at 104.33 yen JPY=D3 . Investors have rushed to riskier currencies and emerging market assets in recent weeks after positive data on COVID-19 vaccine efficacy and signs of stability in U.S. politics, which has weighed broadly on the dollar.

    Sentiment for the greenback took a hit after data on Wednesday showed weekly U.S. jobless claims rose more than expected and personal incomes fell.

    Some economists say more job losses are likely as many U.S. states reinforce restrictions on businesses to curb a spread of coronavirus infections.

    The dollar index =USD against a basket of six other currencies was near the lowest in more than two months.

    In Asia, trading in the dollar is likely to be subdued because U.S. financial markets are closed later on Thursday for the Thanksgiving holiday.

    Investors will closely monitor the onshore yuan CNY=CFXS to see if China's currency will resume its advance toward a 29-month high set last week.

    The Australian dollar AUD=D3 traded near its highest since September, supported by improving risk appetite and strong Chinese demand for the commodities that Australia exports.

    The New Zealand dollar NZD=D3 traded near its strongest level in more than two years.

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    	Currency bid prices at 9:16 AM (0016 GMT) 
    
     Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
    											  Previous				   Change				  
    											  Session											
     Euro/Dollar	   EUR=EBS	$1.1925		$1.1914	 +0.10%		 +6.37%	  +1.1925	 +1.1915 
     Dollar/Yen		JPY=D3	 104.3300	   104.4200	+0.00%		 -3.86%	  +104.4150   +0.0000 
     Euro/Yen		  EURJPY=	124.40		 124.43	  -0.02%		 +2.01%	  +124.4900   +124.3800 
     Dollar/Swiss	  CHF=EBS	0.9073		 0.9081	  -0.07%		 -6.22%	  +0.9082	 +0.9075 
     Sterling/Dollar   GBP=D3	 1.3387		 1.3386	  +0.03%		 +0.96%	  +1.3389	 +1.3382 
     Dollar/Canadian   CAD=D3	 1.3004		 1.3007	  -0.02%		 +0.11%	  +1.3007	 +1.3002 
     Aussie/Dollar	 AUD=D3	 0.7364		 0.7365	  -0.01%		 +4.96%	  +0.7366	 +0.7362 
     NZ				NZD=D3	 0.7006		 0.7007	  -0.03%		 +4.10%	  +0.7014	 +0.7004 
     Dollar/Dollar																				   
    

    All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

 
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