FOREX risk currencies hit as the sour mood boosts the dollar

* Commodity currencies hit lows lasting several weeks

* If risk sentiment wanes, the dollar wins

* Graphic: World FX Rates

LONDON, Feb. 6 / PRNewswire / – Riskier currencies like the commodity-pegged Australian dollar, Canadian dollar and Norwegian krone fell to multi-week lows against the US dollar on Thursday as poor risk sentiment in world markets boosted the greenback.

The fall in stocks on Wall Street on Wednesday, overnight in Asia and the opening in Europe helped to shift sentiment.

At 0852 GMT, the dollar was up 0.14% against a basket of currencies.

It gained against the Aussie, which was down 0.8% to 76.02 US cents, its lowest level since December 30 against the dollar.

The neighboring New Zealand dollar, or kiwi, fell half a percent to 71.22 US cents.

The Canadian dollar, or loonie, hit its lowest level in a month, falling to 1.286 the US dollar.

Norway’s krone fell to its lowest level in five weeks at 8.7226 to the dollar and fell as much as 0.8% in early London trading.

Analysts note that some of the optimism about vaccines that is fueling a global economic recovery has waned as some countries, particularly some in Europe, have been slow to adopt and struggle with them.

The European Union, far behind the US, China and the UK in vaccine use, urged AstraZeneca to outline how it would supply the block with reserved doses of COVID-19 vaccine from plants in Europe and the UK.

The UK said Thursday it must get all of the COVID-19 vaccines it ordered and paid for.

« The story of the weakness of the European recovery continues, » said Lars Sparresø Merklin, senior analyst at Danske Bank.

« A vaccine shortage is now the focus and risk aversion to European assets from earlier this week has spread to global assets. The USD was the natural winner. »

There were also expectations for more boring economic news, with data supposed to show that as COVID-19, the U.S. economy was probably shrinking at its sharpest pace since World War II in 2020.

The Commerce Department’s snapshot of fourth-quarter gross domestic product on Thursday is also expected to show the recovery from the pandemic, which is easing after the coronavirus resurgence and depletion of nearly $ 3 trillion in government aid.

The Federal Reserve on Wednesday left its policy rate near zero overnight and pledged to continue injecting money into the economy through bond purchases, noting that « the pace of economic and employment recovery has slowed in recent months. »

Across the pond, the euro was below $ 1.21, down 0.2% the day after losing its lowest level in over a week against the dollar on Wednesday.

Policy makers at the European Central Bank (ECB) have stepped up their mention of the euro in recent weeks. The latest comments suggest that the ECB might even lower its deposit rate to test the strength of the continent’s common currency.

(Reporting by Ritvik Carvalho, editing by William Maclean)

FOREX risk currencies hit as the sour mood boosts the dollar
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