Dollar Near Two-and-Half Year Low, Pound With Eyes to Brexit Talks

The dollar started the week on the back foot on Monday after soft U.S. jobs data only solidified expectations of a fresh economic package, while the British pound eyed last-ditch trade talks between the United Kingdom and European Union.

The dollar index stood little changed at 90.726, having hit a 2 1/2-year low of 90.471 on Friday. The euro changed hands at $1.2133, having climbed on Friday to as high as $1.2177, a level last seen in April 2018.

Friday’s U.S. jobs data showed non-farm payrolls increased by 245,000 last month, the smallest gain since May, in a sign the jobs recovery is losing momentum on the third wave of coronavirus infections.

Yet traders perceived the data as putting pressure on Washington to pass a new round of stimulus to help the coronavirus-battered economy, keeping overall risk appetite intact and capping the U.S. dollar against riskier currencies.

Chinese policymakers are comfortable with the yuan’s rise as the country’s economic rebound accelerates and the central bank gives the market greater leeway in setting the currency’s value, sources told Reuters.

The yuan, also known as the renminbi, moved little after data showing China’s exports rose at the fastest pace in nearly three years in November.

Sterling traded little changed at $1.3422, stepping back from 2 1/2-year high of $1.3540 touched on Friday as investors looked to talks between Britain and the EU this week to avert a chaotic parting of ways at the end of the year.