Dollar sinks for 3rd straight session as risk sentiment rises

Wednesday,   20-Jan-2021   02:54 PM (IST)

The dollar sank against a basket of currencies for a third straight session on Wednesday as improved sentiment buoyed riskier currencies such as the Aussie dollar and the euro. The Australian dollar was the biggest mover in the G10 group of currencies, gaining half a percent to $0.7734. The New Zealand dollar was a close second, up 0.35% at $0.7140. Ebbing political turmoil in Italy, with Prime Minister Giuseppe Conte winning a crucial vote to stay in power, helped lift the euro to $1.2158, already buoyant on a survey that showed improving investor sentiment in Germany. the world will be watching Joe Biden's inauguration as U.S. President at noon in Washington (1700 GMT), traders were more focused on his policies than the ceremony. U.S. Treasury Secretary nominee Janet Yellen urged lawmakers to "act big" on stimulus spending at her confirmation hearing and said she believes in market-determined exchange rates, without expressing a view on the dollar's direction. The index that measures the dollar's strength against a basket of peers was down 0.1% at 90.390. While the dollar has perked up in recent weeks on the back of a rise in U.S. Treasury yields, investors still expect the currency to weaken. Positioning data shows investors overwhelmingly short dollars as they figure budget and current account deficits will weigh on the greenback. Sterling traded 0.2% higher to the dollar at $1.3668, up for a third straight day.