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USD on Back Foot, Biden Optimism Bolsters Riskier Currencies

The dollar declined versus major peers on Thursday as optimism that new U.S. administrations massive stimulus package will bolster growth sapped demand for safehaven currencies.

Riskier commodity currencies were supported as Asian stocks followed U.S. equities in rising to new records after Joe Biden, who has laid out plans for a 1.9 trillion pandemic relief package, was sworn in as president.

Risk sentiment is quite positive right now and we expect it to remain so this year, with growth expected to rebound quite strongly, said Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo.

The Canadian dollar and Norwegian crown are likely to outperform, while European currencies lag, he said.

The greenback should also strengthen this year against the euro as the United States recovers faster than most other countries, he added.

The U.S. currency slipped 0.2 to C1.2611 in Asia, declining for a third day. It touched a threeyear low at C1.2607 overnight, after the Bank of Canada opted not to cut interest rates.

The dollar slid 0.4 to 8.456 Norwegian crowns, also a third day of declines.

The Aussie dollar rose 0.4 to 77.74 U.S. cents, adding to a 0.7 rally in the previous session. Australia boasted another solid rise in employment in December, data released Thursday showed.

Biden was sworn in as the 46th president of the United States on Wednesday, vowing to end the uncivil war in a deeply divided country reeling from a battered economy and a raging…

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