Dollar stabilizes but likely to decline over the long term

The dollar was on the defensive on Thursday as downbeat U.S. economic data and optimism about coronavirus vaccines boosted risk sentiment for global commodities and emerging markets.

The pound stood almost at a two-month high against the dollar as traders await the EU-Britain trade talks this week.

The dollar index neared its lowest level in two months. The greenback stood at 104.32 on the yen. Against the euro, it traded at $1.1926, near its weakest level in over two months.

The pound bought $1.3392, near its strongest level since early September. It steadied at 89.02 pence per euro. 

The dollar’s rapid decline hinted at a short term rebound, experts said. However, some traders expect the dollar to fall over the longer term.

Sentiment for the dollar fell on Wednesday after data showed that U.S. unemployment claims rose more than expected.

The Aussie stood near its strongest level in three months, while the kiwi neared its highest level in two years. 

In onshore trade, the yuan hit 6.5688 on the dollar.