Dollar turns higher as u. S. Stocks weaken

A £10 note is seen alongside euro notes and US dollar bills. Matt Cardy | Getty Images The dollar rose in choppy trading on Wednesday for a fourth straight session, as selling momentum eased

with stocks under pressure, but positive vaccine news and prospects of more U.S. fiscal stimulus next year should keep pressure on the greenback. In midday trading, the dollar gained 0.2%

against a basket of currencies at 91.067. It reached an April 2018 low of 90.47 last Friday. It hit session highs versus the yen and Swiss franc. The euro, on the other hand, fell 0.2% to

$1.2079 , but was still on track for an annual gain of nearly 8%, its largest since 2017. "This move of dollar weakness is starting to run out of steam in the short run," said

Ranko Berich, head of market analysis at Monex Europe in London. "Euro/dollar is rejecting last week's highs, for example." Riskier currencies, including the Australian and

New Zealand dollars as well as the Chinese yuan, led gains against the dollar, but have come off their highs. Both the Aussie unit and Chinese currency hit 2-1/2-year peaks earlier. The

dollar's downtrend, however, remained the pervasive sentiment. With U.S. coronavirus cases exceeding 15 million on Tuesday, regulators moved a step closer to approving a COVID-19

vaccine, while Britain started inoculating people on Tuesday. Investors are also tracking negotiations over U.S. coronavirus aid, with the Trump administration proposing a $916 billion

package on Tuesday after congressional Democrats rejected a slimmer plan. "The narrative that the market is working off for now is that there would be a reflationary environment in the

United States with the additional stimulus," Monex's Berich said. "This environment overall is conducive to dollar weakness." The dollar's losses overall have been

most severe versus the euro in recent weeks as economic activity data suggested Europe is outperforming the United States. German investor sentiment rose in December on expectations that

vaccines against the coronavirus will boost the economic outlook, a survey showed this week. RISING YUAN The dollar dropped to 6.5198 yuan in onshore trading , its lowest since June 2018,

putting the yuan up by more than 10% from its May lows, boosted by the softer dollar and steady inflows into Chinese stocks and bonds. Sterling was volatile, up 0.2% against the dollar at

$1.3379 before a Wednesday dinner between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen in Brussels that is seen as a last-ditch attempt to

salvage a Brexit trade deal. "Bottomline, a Brexit trade deal is the likeliest outcome, although a complete collapse in talks cannot be ruled out," said Monex's Berich.

Rumblings in the money markets grew with swap markets indicating a growing demand for dollars heading into the end of the year. Three-month euro cross-currency basis swap spreads widened to

minus 27 basis points, but were well below a March peak of nearly minus 90 basis points. The Australian dollar rose to its highest since June 2018 against the greenback and was last up 0.6%

at US$0.7451.