Dollar Falling to Its Lowest Level in Two And a Half Years Due to Hopes of Vaccine And Stimulus

The dollar fell Thursday, December 3, to its lowest level in two and a half years against a basket of currencies, as investors bet that more economic stimulus from Washington and expected to start distributing vaccines for Covid-19 will support high-risk assets.

While US lawmakers have failed to reach an agreement on new aid to ease the pandemic-ravaged economy, there are initial indications that a $908 billion proposal with bipartisan approval could gain traction.

Investors expect lawmakers to eventually reach an agreement as the two parties also face a December 11 deadline to pass a $1.4 trillion budget or risk a government shutdown.

The single European currency rose slightly to $ 1.2119, touching its highest level since late April 2018, and the dollar index fell to its lowest level in two and a half years at 90.948 and settled in the last trading at 90.992.

The US currency fell against most other currencies, except for the Japanese yen, which is considered a safe haven, as the dollar held on to its rise against the Japanese currency at 104.47 yen.

The Australian dollar was trading at $ 0.7409, after hitting a 26-month high in the previous session, after data showed that Australia’s economy rebounded more than expected in the third quarter.

The Chinese yuan traded in foreign trade at 6.5478 to the dollar, near its highest level in two and a half years that touched it last month, to maintain its strength due to expectations that the White House under the administration of US President-elect Joe Biden will be a more favorable factor for the growth of China’s economy.

The pound sterling settled near its highest level in three months, and recorded in the latest trading 1.3387 after volatile dealings on Wednesday as markets await whether Britain and the European Union will be able to reach a trade agreement.