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Fears grew rose of a chaotic no-trade deal Brexit on Dec. 31
when the United Kingdom finally leaves the EU.
In the United States, Friday's jobs data showed non-farm
payrolls increased by 245,000 last month, the smallest gain
since May, a sign the jobs recovery was slowing.
"The recent loss of momentum is a concern as it suggests that it
will take longer to reverse the negative hit to the U.S. labour
market from the COVID shock, given renewed disruption from the
third wave," said Lee Hardman, currency analyst at MUFG, adding
that this "will increase pressure on both Congress and the Fed
to deliver further stimulus."
Talks aimed at delivering fresh coronavirus relief gathered
momentum in the U.S. Congress on Friday, as a bipartisan group
of lawmakers worked to put the finishing touches on a $908
billion bill. Members of Congress are expected to offer the
legislation as early as Monday.
In addition, the Federal Reserve is expected to make more
adjustments to its quantitative easing later this month.
"In the current trading environment, the increasing speculation
over looser U.S. fiscal and monetary policies provides support
for risk assets and weighs on the U.S. dollar," Hardman said.
An index that tracks the dollar against a basket of currencies
was last trading up 0.2% at 91, close to 90.47, its weakest
since April 2018.
Over the past week, the U.S. dollar sell-off has extended
further, with weakness most evident against the Swiss franc,
euro and Canadian dollar.
The euro fell 0.1% to 1.2110, but remained close to $1.2177, its
highest since April 2018. It was unaffected by data showing
booming car sales drove a stronger-than-expected jump in German
industrial output in October.
Leveraged funds continued to add more euro long positions in the
week to Dec. 1, taking the total amount of $21 billion,
according to data from Commodity Futures Trading Commission (CFTC).
The British pound was down 1.2% at $1.3275 and by 1.3% against
the euro at 91.35 pence <EURGBP=D3>, after reaching
two-and-a-half week lows against both the dollar and the euro.
The biggest move in positioning happened in the Japanese yen,
with hedge funds taking the total yen longs to a four-week high
of a total $5.71 billion.
Elsewhere, the Norwegian crown fell 0.4% to 8.8250 against the
dollar and 0.2% versus the euro to 10.5925, having touched
earlier a two-week low against the dollar of 8.9170 and a
near-three-week low of 10.7775.
The Swedish crown was also down, against both the dollar and the
euro; the move against the euro was bigger.
Sweden's central bank will keep monetary policy expansionary for
as long as necessary to fight the economic effects of the
pandemic, the minutes of the November policy meeting, published
on Monday, showed.
The Australian dollar fell 0.5% at 0.7385 versus the U.S.
dollar. The New Zealand dollar shed 0.3%.
The Japanese yen was flat versus the dollar at 104.24.
(Reporting by Olga Cotaga, editing by Larry King)
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