January 06, 2021 at 08:33AM

The U.S. dollar slipped on Wednesday as Democrats took the lead in runoff votes that will determine control of the U.S. Senate and possibly pave the way for a big spending administration under President-elect Joe Biden. The euro rose past major resistance to a new 32-month high and the greenback struck multi-year lows on the Swiss franc and the Australian and New Zealand dollars. Against a basket of currencies, it hit its lowest since April 2018.

Analysts generally assume a Democrat-controlled Senate would be positive for economic growth globally and thus for most riskier assets, but negative for bonds and the dollar as the U.S. budget and trade deficits swell even further. “A Democratic-led government is expected to add more stimulus to help mitigate the virus crisis and…that means that there’s going to be a weaker dollar,” said Paul Sandhu, head of multi-asset quant solutions at BNP Paribas in Hong Kong.

The boost to the economy also makes investors more comfortable with risk and likely to seek assets outside the U.S., especially in emerging markets, Sandhu said. Democrats will control both houses of Congress if they win both Senate seats up for contest in Georgia. NBC television and election analytics firm Edison Research called one of the contests in favour of Democrat Raphael Warnock and Edison had Democrat Jon Ossoff leading in the other, but the latter race was still too close to call.

The euro rose 0.3% to $1.2335 in late Asia trade as the results became clearer, breaking past resistance at $1.2310. The Australian and New Zealand dollars each rose 0.5%, with the Aussie hitting $0.7798 and the kiwi $0.7289. The dollar had on Tuesday fallen through a major support level against the yen and it extended lower to a new 10-month low of 102.60 in early Asia trade on Wednesday. It also hit an almost six-year trough of 0.8767 Swiss francs. Against a basket of currencies, the dollar fell 0.3% to 89.272. Sterling rose 0.2% to $1.3653.

Dollar sinks as investors weigh Democrat gains in Georgia, Reuters, Jan 6

Continue Reading…

From: The FxPro News Team https://fxpro.news/daily-forex-outlook/dollar-sinks-as-investors-weigh-democrat-gains-in-georgia-20210106/
Selected by fonecable.com

Search Web: Dollar sinks as investors weigh Democrat gains in Georgia

Recent Posts


Related Listening

December Reports

November Reports

October Reports

September Reports

August Reports

July Reports

Leave a Reply

Your email address will not be published. Required fields are marked *

Chinese (Simplified) ZH-CN English EN French FR German DE Spanish ES