* The green dollar and other traditional paradises remain behind recorded stocks
* The Canadian dollar rose overnight earnings in commodity currencies
* Chart: World exchange rates tmsnrt.rs/2RBWI5E
TOKYO, January 21 (Reuters) – The dollar fell against major colleagues on Thursday, with optimism that the new US administration’s massive stimulus package will support increased demand for safe haven currencies.
Higher-risk currencies were supported as Asian stocks followed US stocks, breaking new records after Joe Biden, who unveiled plans for a $ 1.9 trillion pandemic aid package, was sworn in as president.
“Risk sentiment is quite positive at the moment and we expect it to remain so this year, with growth expected to return quite strongly,” said Shinichiro Kadota, senior foreign exchange strategist at Barclays Capital in Tokyo.
The Canadian dollar and the Norwegian krone are likely to outperform, while European currencies lag behind, he said.
The dollar is also expected to strengthen against the euro this year, as the United States is recovering faster than most other countries, he added.
The US currency fell 0.2% to C $ 1.2611 in Asia, down for the third day. It hit a three-year low of C $ 1.2607 overnight after the Bank of Canada chose not to cut interest rates.
The dollar fell 0.4% to 8,456 Norwegian kroner, also the third day of decline.
The Australian dollar rose 0.4% to 77.74 US cents, adding to a 0.7% rally in the previous session. Australia boasted another solid increase in employment in December, according to data released on Thursday.
Biden was sworn in as the 46th president of the United States on Wednesday, vowing to end the “uncivil war” in a deeply divided country, riddled with a battered economy and a furious coronavirus pandemic that has killed more than 400,000 people. of Americans.
North of the border, the Bank of Canada said on Wednesday that the arrival of a COVID-19 vaccine and stronger external demand illuminate the medium-term economic outlook, opting to keep the key interest rate overnight at 0.25%. Money markets followed the prospect of a so-called micro-rate reduction of less than 25 basis points.
The dollar lost 0.2% to 103.59 yen on Thursday, another safe-haven currency, after falling to a two-week low of 103.33.
The Bank of Japan maintained monetary policy unchanged on Thursday, while revising its economic forecasts for next fiscal year.
The euro gained 0.2%, reversing a similar decline from the previous session, to trading at $ 1.2135.
The European Central Bank also decides on policy on Thursday, without expecting any changes.
European countries are struggling to contain the new coronavirus, amid concerns that a new variant could lead to tighter blockages and greater economic pain.
The dollar index fell 0.2% to 90,268, falling for the third day since it hit a nearly one-month high of 90,956 on Monday.
The green dollar started the year on a firmer footing, supported by rising US Treasury yields in response to Biden’s massive stimulus plan.
But many analysts expect a return to the downward trend of the dollar, which saw it lose almost 7% in 2020, amid expectations of US monetary policy that will remain extremely weak and hope for a global post-pandemic recovery.
“The weakness of the USD against EM and FX commodities must continue to operate against the background of the vaccine and the US stimulus has led to global reflection, but the USD vs EUR outlook is not as clear in the short term,” Westpac strategists wrote in a statement. research note.
“A reassessment of the US outlook following Biden’s $ 1.9 billion fiscal spending plan, compared to a still weak picture of the eurozone, could conceivably hold the USD against the euro.”
Full coverage for Eikon readers of the US presidential transition here
For multimedia coverage, please open www.reuters.com/world/us in a separate browser
Reporting by Kevin Buckland; Mount by Simon Cameron-Moore