FOREX-Dollar set for worst week in a month; euro rides high


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    * Graphic: World FX rates in 2020

 (Updates prices)
    By Iain Withers
    LONDON, Dec 4 (Reuters) - The dollar was headed for its
worst week in a month on Friday while the euro gained, as
investors bet the U.S. currency has further to fall and that the
worst of the COVID-19 pandemic may  be over within months.
    A flurry of positive vaccine news has helped drive a rally
in riskier currencies, while actions taken by the Federal
Reserve have weakened the dollar.
    The dollar index dropped to a two-and-a-half-year low of
90.504 on Thursday and is on track for a more than 1% fall over
the week. It edged down 0.1% on the day at 90.578.  =USD 
    "It has been another bad week for the US dollar," analysts
at MUFG said in a note. "It will encourage speculators to
rebuild short US dollar positions which have been pared in
recent months."
    Investors have turned short dollars, figuring rates will
stay low for a long time in the United States, forcing
yield-seekers to head elsewhere for better returns.
    Investors will get a further indication of how the U.S.
economy is holding up at 1330 GMT, with monthly payrolls data
expected to show employment growth, but at a slower pace. 
    The euro has been one of the biggest winners from recent
dollar weakness, breaking decisively above $1.20 this week and
is on track for a more than 2% weekly gain.  EUR=EBS 
    The single currency hit a two-and-a-half-year high of
$1.21770, just above the previous day's benchmark. It was last
up 0.2%.  EUR=EBS 
    "The euro is holding above the $1.21 level for the first
time since spring 2018, despite the fact that there is only a
week to go before the European Central Bank is expected to add
more policy stimulus," said Rabobank strategist Jane Foley.
    The yen  JPY=  was broadly steady against the dollar on
Friday, while sterling jittered against the dollar and euro with
Brexit trade talks between the UK and European Union at a
critical stage.*:nL1N2IK0QJ  GBP=D3   EURGBP+D3 

 (Reporting by Iain Withers, Additional reporting by Tom
Westbrook in Sydney; editing by Kim Coghill, Larry King)

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