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LONDON, Jan 18 – The dollar appreciated for the third day in a row to a four-week high on Monday as a surge of risk aversion swept through currency markets, knocking the Australian dollar and the British pound down.
* With US markets closed for a holiday on Monday and Joe Biden set to take over as US president on Wednesday, the major currencies remained within narrow ranges, carefully watching the new administration’s stance on the dollar.
* While outgoing President Donald Trump has publicly criticized the dollar’s strength for years, Janet Yellen, chosen by Biden to take over the Treasury, is expected to make clear that the country is not looking for a weaker dollar, according to Wall Street. Journal.
* Additionally, Biden’s plan for a $ 1.9 trillion stimulus package has also fueled a widespread rise in U.S. Treasury yields and reversed a late-2020 decline in the value of the dollar.
* The dollar index rose to a one-month high on Monday and traded at 90.94, its highest level since Dec. 21.
* “History suggests a strong seasonal pattern that points to the possibility of further strength in the short term, but this seasonal bias could be less compelling this year as the broad macroeconomic context remains consistent with continued optimism and support for risk assets, “MUFG strategists said in a weekly note.
* The euro fell to a six-week low of $ 1.2054.
(Reporting by Saikat Chatterjee; Edited in Spanish by Gabriela Donoso)
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