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The Aussie Changed Slightly Wednesday. What about the Kiwi?

The Australian dollar changed insignificantly at 75.525 U.S. cents, remaining near the two 1/2-year high of 75.780 it reached on Monday.

 

Meanwhile, the New Zealand dollar exchanged hands at 70.86 U.S. cents after soaring to 71.20 on Monday for the first time since April 2018. 

 

On Tuesday, top U.S. congressional leaders began a second meeting, trying to finalize $1.4 trillion in spending and end a standoff on Covid-19 relief. They already signaled optimism following their first gathering. 

 

Investors are watching out for the outcome of a two-day Federal Reserve policy meeting on Wednesday. They think that policymakers will likely keep the key overnight interest rate pinned near zero, along with signaling that it will stay there for years to come. According to experts, such a decision will further boost investors’ risk sentiment. 

 

Many analysts also expect the agency to give new guidance on how long it will keep up its bond-buying program.

 

How did the U.S. dollar fare?

 

The dollar index traded at 90.477 against a basket of currencies at last, after plunging as low as 90.419 on Monday. The currency tumbled down near its two 1/2-year low points on Wednesday. The coronavirus pandemic relief measures and progress toward a massive U.S. government spending bill boosted risk appetite, while also weakening demand for safe-haven assets.

 

The U.S. further supported the sentiment, expanding its roll-out of the Covid-19 vaccine from Pfizer Inc and German partner BioNTech SE. Meanwhile, Moderna Inc’s vaccine is also awaiting approval, which it may gain this week.

 

In Europe, the British pound managed to hold on to more than 1% of gains from Tuesday. According to a new report, an elusive Brexit trade deal may be close at last. This news strengthened the currency, even though British Prime Minister Boris Johnson maintained that the talks would most likely lead to  no deal.

 

The U.S. dollar traded at $1.21540 per euro, hovering near the two 1/2-year low of $1.2177 reached on Monday. The currency also changed hands at 103.64 yen, after tumbling down by 0.4% against the Japanese currency on Tuesday.

 

Meanwhile, the pound last sat at $1.3444 after rallying by 0.9% in the previous session. The currency skyrocketed to $1.3540 earlier this month, a level not reached since mid-2018.

 

Bart Wakabayashi, Tokyo branch manager of State Street Bank in Tokyo, noted that we see greenback weakness across the board, because of all the positives that have hit the market. It seems there’s a feel strong momentum in the market.

 

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