FOREX-Euro gains against yen, sterling after Brexit deal reached

nayla good
    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

 (Adds quotes, updates prices; previous LONDON)
    By Karen Brettell
    NEW YORK, Dec 28 (Reuters) - The euro gained against the
safe-haven Japanese yen and Swiss franc on Monday as risk
sentiment was boosted by Britain reaching a trade deal with the
European Union.
    Britain clinched a narrow Brexit trade deal with the
European Union on Thursday, just seven days before it exits one
of the world's biggest trading blocs in its most significant
global shift since the loss of empire.
    "What we are seeing is a continuation of the pricing out of
hard Brexit risk," said Ulrich Leuchtmann, head of FX research
at Commerzbank in Frankfurt.
    The news boosted risk taking on Monday - which due to the
Christmas holiday was the first full day's trade since the deal
was announced - with German and U.S. stocks hitting record
highs.
    Risk sentiment also improved after U.S. President Donald
Trump on Sunday signed into law a $2.3 trillion pandemic aid and
spending package, restoring unemployment benefits to millions of
Americans and averting a federal government shutdown.

    The euro gained 0.36% to 126.69 yen. It earlier
reached a seven-month high of 1.0892 against the Swiss franc
, before falling back to be last at 1.0862, up 0.07% on
the day.
    The single currency was up 0.05% against the U.S. dollar
 at $1.2226.
    It gained 0.63% against sterling to 0.9044.
    Sterling has underperformed since the Brexit deal was
reached, with traders saying that the news was likely priced in.
    Also “I would argue that this is markets slowly but surely
acknowledging that this is not an optimal deal for the UK,” said
Andreas Steno Larsen, global chief FX and rates strategist at
Nordea in Copenhagen. 
    “This is rather a very slim deal that merely avoids the
cliff-edge but there are still large gaps that will have to be
dealt with in 2021 and frictionless trade is not secured,”
Larsen said.
    The British pound dipped 0.15% against the U.S. dollar
 to $1.3517, and was holding below a two-and-a-half-year
high of $1.3625 reached on Dec. 17.
    Bitcoin climbed 3.88% to $27,274 but was below a
record high $28,378 reached on Sunday.
    “There is a lot of enthusiasm among (crypto) traders who
truly believe in this asset class, and they know that the rally
has only begun because we were only recovering losses for the
past few years,” Naeem Aslam, chief market analyst at AvaTrade,
said in a report.
    The dollar slipped 0.04% against a basket of currencies
 to 90.15.
    Investors are betting that the dollar will continue to
decline after falling almost 7% this year as the Federal Reserve
holds rates near zero and the U.S. economy struggles to recover
from COVID-related business shutdowns.
    Win Thin, global head of currency strategy at Brown Brothers
Harriman, expects the dollar index to test its February 2018 low
of 88.25. Then “what happens to the greenback after that will
largely depend on how well the U.S. controls the virus in 2021
as well as the outlook for further fiscal stimulus,” Thin said
in a report.
    The dollar slipped 0.30% against the Canadian dollar
to $1.2829.
    
    ========================================================
    Currency bid prices at 9:32AM (1432 GMT)
 Description      RIC         Last           U.S. Close   Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                    Change                 
                                              Session                                            
 Dollar index                 90.1480        90.2010      -0.04%         +0.00%      +90.3690    +89.9780
 Euro/Dollar                  $1.2226        $1.2220      +0.05%         +9.05%      +$1.2253    +$1.2179
 Dollar/Yen                   103.6300       103.6550     -0.09%         -4.65%      +103.7000   +103.4200
 Euro/Yen                     126.69         126.23       +0.36%         +3.88%      +126.7300   +126.0700
 Dollar/Swiss                 0.8884         0.8912       -0.09%         -8.16%      +0.8919     +0.8881
 Sterling/Dollar              $1.3517        $1.3570      -0.15%         +1.89%      +$1.3573    +$1.3475
 Dollar/Canadian              1.2829         1.2868       -0.30%         -1.23%      +1.2859     +1.2814
 Aussie/Dollar                $0.7590        $0.7588      -0.16%         +8.17%      +$0.7622    +$0.7578
 Euro/Swiss                   1.0862         1.0854       +0.07%         +0.08%      +1.0892     +1.0851
 Euro/Sterling                0.9044         0.8987       +0.63%         +6.98%      +0.9057     +0.8992
 NZ                           $0.7111        $0.7099      -0.18%         +5.66%      +$0.7138    +$0.7100
 Dollar/Dollar                                                                                   
 Dollar/Norway                8.6400         8.6400       +0.41%         -1.11%      +8.6815     +8.5985
 Euro/Norway                  10.5633        10.4829      +0.77%         +7.37%      +10.5945    +10.5102
 Dollar/Sweden                8.2714         8.2318       +0.53%         -11.51%     +8.2929     +8.2179
 Euro/Sweden                  10.1136        10.0604      +0.53%         -3.40%      +10.1240    +10.0567
 

    

 (Additional reporting by Yoruk Bahceli in Amsterdam
Editing by Susan Fenton)
  
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