Dollar Declining on Hopes of New Stimulus

The dollar fell to its lowest level in several years against many currencies on Wednesday, December 30th, as dealers bypassed a new delay in approving monetary stimulus in the United States and continued betting on the possibility of additional financial aid.

The dollar hit its lowest level in more than two years against the euro and the New Zealand and Australian dollars. It fell to its lowest level in more than five years against the Swiss franc, while it weakened widely against Asian currencies.

The dollar fell as riskier assets rose since US President Donald Trump signed the aid and spending law on Sunday, as more stimulus in the world’s largest economy reduces demand for possession of a safe-haven dollar.

The dollar fell to 1.2295 against the euro on Wednesday, its lowest level since April 2018.

And touched 0.8815 against the Swiss franc, the lowest level since January 2015. The British pound rose to 1.3552 dollars. The dollar fell to 103.26 yen.

The dollar index fell against a basket of six major currencies to 89.711, its lowest level in more than two years.

Many investors are expecting a new US administration to take office after President-elect Joe Biden is sworn in on January 20.

The Australian and New Zealand dollars hit their two-and-a-half-year highs against the US dollar. The two currencies are considered indicators of risk appetite as they are linked to global primary commodities. The yuan rose in domestic transactions to 6.5251 per dollar.