The dollar touched a more than two-year low on Monday and is set to log its largest monthly fall since July as a combination of vaccine optimism and bets on more monetary easing in the United States drove investors out of the world’s reserve currency.
Against a basket of currencies, the greenback slipped 0.1% to 91.707, its lowest since April 2018. The risk-sensitive New Zealand dollar hit a two-and-a-half year high and is headed for its best monthly percentage gain in seven years.
“The themes remain familiar: broad dollar weakness amid improving risk appetite,” ANZ Bank analysts said in a note.
“This sentiment is likely to continue into December and the (U.S. Federal Reserve) meeting, at which some further action is likely, given the near-term virus risks in the United States.”