SYDNEY- The dollar was under pressure on Tuesday, after closing out its worst month since July with a little bounce and as investors reckon
on even more US monetary easing. The risk-sensitive Australian and New Zealand dollars clawed back some of Monday’s losses, each rising roughly 0.2 percent early in the Asia session, although both remained just below milestone peaks hit a day ago.
The euro rose 0.1 percent but kept shy of $1.20, while sterling held on to gains made against the dollar as traders cling to hopes for a Brexit trade deal before the year’s end.
Investors are heavily short dollars as optimism about promising vaccine trials drives buying of riskier currencies and higher yielding assets outside the United States.
Even worries about rising coronavirus cases have not offered too much support to the greenback, as speculation grows that the Federal Reserve might act to support the economy through a tough winter before vaccinations can turn the tide on the pandemic.
“There’s a general view that there’ll be something in the December meeting…given there’s no real fiscal development in the last few months,” said BNZ senior markets strategist Jason Wong.
The Fed meets to set policy on Dec. 15 and 16, though before then – on Tuesday and Wednesday – Fed Chair Jerome Powell will appear before Congress and his remarks will be closely watched for any clues as to the next moves.