Dollar Falls to End Rough Year
DECEMBER 31, 2020
Another day, another modest drop for the greenback.
Despite a strong rally at the beginning of the pandemic, the U.S. dollar has experienced widespread weakness this year. The Bloomberg Dollar Index is set for a 5.7% decline, its biggest since 2017. The greenback is also at or near multi-year lows versus the Euro, British pound, Australia and New Zealand dollars, and others.
There is nothing on today’s docket that will materially change the dollar’s fortunes. Watch for sharp price movement in thin trading, especially in the afternoon hours. Global currency markets close at 5 pm Eastern.
What to Watch Today…
- No major events scheduled for today
HOLIDAY HOURS THIS WEEK
December 31—8:30a to 5p EST; January 1—CLOSED; Tempus Online open 24×7.
The Australian and New Zealand dollars are up this morning, capping an impressive year for the Antipodean duo. Kiwi is trading at its strongest level since 2018 and will have its biggest yearly gain in a decade. The Australian dollar is up 10% this year versus its American rival.
The British pounded continued to gain to a fresh 2.5 year high against the dollar overnight. After a four- and half-year odyssey, the U.K. will finally leave the European Union at 11 p.m. tonight. The long-awaited post-Brexit trade deal was approved by Parliament yesterday. We maintain our position that the U.K. is in a weaker position outside of the EU than within it. However, much of the uncertainty the nation has felt over the past half-decade will be put to rest, allowing the sterling to rise.
GBP/USD is up 3% this year, a much smaller gain than some of the dollar’s other major counterparts.