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Dollar falls as improving sentiment boosts riskier currencies

Monday,   22-Feb-2021   08:54 AM (IST)

The U.S. dollar fell to a three-year low against its Australian counterpart and teetered near three-year low against the British pound as progress in curbing coronavirus infections boosted sentiment for riskier assets. The greenback also slipped toward a three-year low against the New Zealand dollar as traders sought currencies with close ties to the global commodities trade due to an improving economic outlook. The U.S. currency, which is often considered a safe asset during times of uncertainty, is likely to fall further as more investors focus on economic recovery once the worst of the coronavirus pandemic passes. The Australian dollar hit $0.7892, its highest since March 2018 while the New Zealand currency rose to $0.7315, its strongest since April 2018. Vaccine rollouts will ease risks to Australia’s economy over the year, ratings agency Fitch said on Monday when it maintained the country’s top AAA credit rating, albeit with a negative outlook. The euro last traded at $1.2124. The British pound bought $1.4030, close to a three-year high. Against the yen, the dollar held steady at 105.45. Australia on Monday began its mass COVID-19 vaccine programme as the country looked set to report no local cases for the third straight day, which gave the Aussie a boost. Sterling is also in focus because British Prime Minister Boris Johnson will plot a path out of coronavirus lockdowns later on Monday, aided by one of the fastest vaccine rollouts in the world. Dollar net short positioning fell last week to $29.09 billion, which is the lowest level since mid-December, according to calculations by Reuters and Commodity Futures Trading Commission data. In the cryptocurrency market, bitcoin eased slightly to $57,090, but was still near a record high as the digital asset gains more mainstream acceptance. Ether, a rival cryptocurrency, fell to $1,918. U.S. dollar net shorts have fallen for four straight weeks, which shows that there are still some investors who are optimistic about the greenback.