FOREX-Dollar falls to lowest level in almost 3 months

    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

 (Updates prices, adds comment, changes byline, previous
dateline was LONDON)
    By Sinéad Carew
    NEW YORK, Nov 27 (Reuters) - The dollar index fell on
Friday, hitting its lowest level in almost three months, after
strong economic data from China favored commodity currencies
over safe havens and equity markets continued their rally.
    The dollar has fallen more than 2.2% so far this month as
global market sentiment has surged following Joe Biden's
election victory and positive COVID-19 vaccine progress, which
reduced demand for the safe-haven currency.
    The Australian dollar hit its highest level since September
after news that China's industrial firms grew in October for a
sixth consecutive month and at their quickest pace since early
2017, pointing to a steady recovery in the manufacturing sector
after it was hard hit by the COVID-19 pandemic.
    The British pound declined against the euro as the European
Union and Britain said there were still substantial differences
over a Brexit trade deal as the EU chief negotiator prepared to
travel to London in a last-ditch attempt to avoid a tumultuous
finale to the five-year Brexit crisis.
    Along with China data and Brexit headlines, Erik Bregar,
head of FX strategy at Exchange Bank of Canada in Toronto cited
month-end selling of the U.S. dollar as investors look to
balance portfolios after solid monthly gains for equities. 
    "There's been talk all week that the U.S. dollar will see
waves of selling going into Monday," said Bregar who also noted
"dollar selling into the London fix every day this week." 
    Wall Street's main indexes rose and the Nasdaq hit a record
high as optimism around an economic rebound next year outweighed
concerns around an expected surge in coronavirus infections
following Thursday's U.S. Thanksgiving holiday.
    "The markets have a tendency to perhaps look through the
fact that we’re going to have a really nasty Q4, possibly a very
nasty Q1 too, in terms of economic data in Europe and the U.S.,
and look through to the better times ahead," said Jane Foley,
senior FX strategist at Rabobank.
    "We’ve seen various stock market indices at all-time highs,
so the dollar under pressure. Also keeping the dollar under
pressure is this perception that the Fed will act, will pressure
the yield curve lower, if need be, particularly if there
continues to be a delay over the fiscal package," she said.
    The U.S. Federal Reserve's latest meeting minutes said that
policymakers could give new guidance on bond-buying "fairly
soon".
    The dollar was down 0.24% against a basket of major
currencies after hitting its lowest level since Sept. 1. The
dollar-yen was down 0.16%. 
    The Australian dollar - seen as a liquid proxy for risk -
hit its highest level in nearly three months in early London
trading and was last up 0.5% at 0.7394.
    Australia's second-largest state, Victoria, which was once
the country's COVID-19 hotspot, said on Friday that it has gone
28 days without detecting new infections.     
    Sterling was down 0.03% against the dollar and the euro was
up 0.26% against the British currency. 
    The euro was up 0.29% at $1.1945, having shown
little reaction to downbeat comments from the European Central
Bank's chief economist Philip Lane on Thursday.

    With market participants long on the euro, Rabobank's Foley
said that euro-dollar could face downsides as the ECB has
signalled that it is watching euro appreciation. The EU  budget
which includes the COVID-19 recovery fund has not yet been
approved.    
    
        Currency bid prices at 10:28AM (1528 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Dollar index                 $91.8050       92.0380     -0.24%         +0.00%      +92.0530    +91.8070
 Euro/Dollar                  $1.1945        $1.1910     +0.29%         +6.54%      +1.1947     +1.1908
 Dollar/Yen                   103.9900       104.2500    -0.16%         -4.18%      +104.2650   +103.9200
 Euro/Yen                     124.20         124.18      +0.02%         +1.85%      +124.3700   +123.9000
 Dollar/Swiss                 0.9055         0.9077      -0.23%         -6.42%      +0.9082     +0.9053
 Sterling/Dollar              1.3356         1.3361      -0.03%         +0.71%      +1.3381     +1.3305
 Dollar/Canadian              1.2979         1.3015      -0.28%         -0.09%      +1.3024     +1.2977
 Aussie/Dollar                0.7394         0.7358      +0.50%         +5.38%      +0.7395     +0.7354
 Euro/Swiss                   1.0816         1.0796      +0.19%         -0.33%      +1.0827     +1.0795
 Euro/Sterling                0.8941         0.8918      +0.26%         +5.76%      +0.8954     +0.8916
 NZ                           0.7037         0.7011      +0.39%         +4.59%      +0.7037     +0.7001
 Dollar/Dollar                                                                                  
 Dollar/Norway                8.8260         8.8770      -0.47%         +0.72%      +8.8805     +8.8355
 Euro/Norway                  10.5430        10.5680     -0.24%         +7.16%      +10.5900    +10.5380
 Dollar/Sweden                8.5080         8.5180      +0.11%         -8.99%      +8.5389     +8.5054
 Euro/Sweden                  10.1620        10.1505     +0.11%         -2.93%      +10.1780    +10.1496
 
 (Reporting by Elizabeth Howcroft; Editing by Chizu Nomiyama and
Nick Zieminski)
  

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