Dollar falls broadly due to continued risk sentiment, Sterling stumbles on Brexit woes

The greenback ended the day lower against majority of its peers on Friday on return of risk sentiment due to optimism that Covid-19 vaccines would be rolled out soon. Sterling dropped across board on Brexit concerns as EU and UK negotiators are scheduled to meet over the weekend.

Versus the Japanese yen, dollar met renewed selling at 104.28 in Australia and fell to session lows at 103.92 in Asian morning due partly to cross-buying in jpy. The pair then staged a short-covering rebound to 104.20 ahead of New York open before retreating again to 103.97 in New York.

The single currency traded with a firm bias in Asia and gained to 1.1932 in early European morning before retreating to 1.1915. However, the pair found renewed buying there and rose to a fresh 11-week peak at 1.1964 at New York close on usd's broad-based weakness together with cross-buying of euro especially vs sterling.

On the data front, Reuters reported euro zone economic sentiment fell for the first time in seven months in November as a second COVID-19 wave struck the continent, depressing the mood in all sectors, particularly those hardest hit by lockdowns such as services and retail.   Rhe European Commission's monthly survey showed sentiment in the 19 countries sharing the euro fell to 87.6 points from 91.1 in October, a shade above market expectations of a decline to 86.5 points.

The British pound also traded with a firm undertone in Asia and gained to session highs at 1.3381 in early European morning before falling to 1.3312 ahead of New York open on Brexit concerns as UK PM Johnson substantial differences remained in the UK and EU trade negotiations. However, cable then pared its losses and staged a strong rebound to
1.3362 in New York on usd's weakness but later tumbled tp 1.3289 near New York on market woes ahead of weekend's Brexit talks.

Reuters reported British Prime Minister Boris Johnson said substantial and important differences remained with the European Union on a Brexit trade deal.   "Clearly there are substantial and important differences still to be bridged but we're getting on with it," Johnson told reporters. "The likelihood of a deal is very much determined by our friends and partners in the EU - there's a deal there to be done if they want to do it."

In other news, Reuters reported Scottish First Minister Nicola Sturgeon has said she wants to hold a second independence referendum as soon as next year, The Times newspaper reported.    The Scottish National Party leader said she anticipates that a vote will take place "in the earlier part" of the next Scottish parliament, which begins next year, The Times said.   "Scotland should have the opportunity to choose whether to become independent in the earlier, rather than the later, part of the next parliament," Sturgeon told ITV Border, according to the Times.

Data to be released this week:

Japan industrial output, retail sales, New Zealand business outlook, Australia business inventories, China non-manufacturing PMI, manufacturing PMI, Swiss retail sales, KOF indicator, Italy CPI, Germany CPI, HICP, Canada current account, producer prices, U.S. Chicago PMI, pending home sales and Dallas Fed manufacturing on Monday.

Japan unemployment rate, manufacturing PMI, Australia building permits, current account, RBA interest rate decision, Swiss GDP, manufacturing PMI, Italy manufacturing PMI, GDP, France manufacturing PMI, Germany manufacturing PMI, EU manufacturing PMI, HICP, Canada GDP, manufacturing PMI, U.S. redbook retail sales, manufacturing PMI, construction spending and ISM manufacturing PMI on Tuesday.

New Zealand import prices, export prices, Australia GDP, Japan consumer confidence, Germany retail sales, Swiss CPI, Italy unemployment rate, EU producer prices, unemployment rate, Canada labour productivity, U.S. mortgage applications, ADP employment change and ISM New York index on Wednesday.

Australia AIG construction index, imports, exports, trade balance, New Zealand building permits, Japan services PMI, China services PMI, Italy services PMI, France services PMI, Germany services PMI, EU services PMI, retail sales, UK services PMI, U.S. jobless claims, services PMI and ISM non-manufacturing PMI on Thursday.

Australia retail sales, Germany industrial orders, France budget balance, Italy retail sales, UK construction PMI, Canada employment change, unemployment rate, trade balance, exports, imports, U.S. non-farm payrolls, private payrolls, unemployment rate, average earnings, trade balance and factory orders on Friday.