Asian session review: the US dollar declined against most major currencies

During today's Asian trading, the US dollar fell slightly against the euro and the yen. Traders ' confidence that the dollar will become cheaper is weakening. This is due to the growing doubts of analysts that the Federal Reserve System (Fed) will maintain the same high volume of monetary stimulus in the event of a significant improvement in the situation in the US economy.

Over the last two months of 2020, the ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell by 5%, and traders mainly bet on further weakening of the dollar in 2021.

"Despite our bearish sentiment against the dollar last year, we now believe that the time has come to close the dollar's sell positions against the euro and lock in a profit," said George Saravelos, currency strategist at Deutsche Bank.

The likelihood of increased stimulus by the administration of President-elect Joe Biden, as well as rapid vaccination against COVID-19 in the United States, improves the prospects for the American economy.

"The acceleration in economic growth will help boost employment and return inflationary forces, which will reduce the pressure on the Fed to artificially keep rates low," said Markus Allenspach, an analyst at Julius Baer.

The pound is rising amid signals that the Bank of England does not intend to move to negative interest rates. The head of the Bank of England, Andrew Bailey, who spoke at the Scottish Chamber of Commerce, rejected the possibility of reducing the base rate to a negative level, noting that such a move "raises many questions."