FOREX-Dollar hits new two and a half year low after month of losses

* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E (Updates prices, adds comment and chart)

LONDON, Nov 30 (Reuters) – The dollar hit its lowest in two and a half years on Monday while riskier currencies were mixed, as the global equities rally that has seen risk appetite surge in November paused for breath.

A combination of Joe Biden’s U.S. election win, hopes for further stimulus and a series of positive COVID-19 vaccine announcements has seen global market sentiment rally this month, prompting the dollar to fall and riskier currencies to strengthen.

China’s manufacturing grew at its fastest pace in more than three years in November, while services sector growth hit a three-year high, data on Monday showed.

On the last day of the month, the dollar was set for its biggest monthly loss against a basket of currencies since July, having wiped 2.5% off its value in November. At 1217 GMT it was at 91.625, down 0.1% on the day.

Meanwhile the New Zealand dollar was poised for its biggest monthly gain since late 2013, helped by a perception that the improving global economic outlook lessens the risk of negative rates.

At 1218 GMT, it was up 0.1% on the day at 0.7042 per U.S. dollar, having hit a new two-year high overnight.

“From a risk perspective, the equity market performances have been very, very significant and that has a been a key factor in what looks like very clear recycling out of U.S. dollars into non-dollar assets, taking advantage and positioning for a more sustained pick-up in global growth,” said Derek Halpenny, EMEA head of research for global markets at MUFG.

“I wouldn’t expect the same in December,” he added. “I think that scale of risk-on is unsustainable and I think now a fair degree of good news in terms of global reflation is priced for 2021.”

U.S.-based drugmaker Moderna said on Monday it will apply for emergency authorization of its COVID-19 vaccine in Europe and the United States, based on full results from a late-stage study showing its vaccine was 94.1% effective with no serious safety concerns.

The offshore yuan is on course for its longest streak of monthly gains in six years, boosted by China’s economic recovery from the coronavirus and steady capital inflows.

At 1222 GMT, it was slightly up on the day at 6.5694 versus the dollar.

The Trump administration is poised to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, according to a document and sources, curbing their access to U.S. investors and escalating tensions with Beijing weeks before Biden takes office.

Elsewhere, the euro rose to new three-month highs of $1.19905. Investors are watching for the key $1.20 level, after the European Central Bank signalled earlier this year it was carefully monitoring the euro-dollar exchange rate.

But MUFG’s Halpenny said the $1.20 level is not a cause for concern for the ECB, since the trade-weighted euro index is more steady, indicating that the move is dollar-driven.

Brexit negotiations remain the focus for the pound, which was steady against the euro at 89.80 pence per euro.

Britain and the European Union are running out of time to agree on a Brexit trade deal, but if good progress is made this week the talks could be extended, Britain’s environment secretary said.

In focus for commodity-driven currencies such as the Norwegian crown is the OPEC+ meeting – two days of talks starting from Monday.

OPEC+ members will consider whether to extend existing oil cuts for three to four months or to increase output gradually from January, OPEC+ sources told Reuters.

The Australian dollar slipped slightly and was flat on the day at 0.7382 at 1225 GMT.

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