© Reuters.

By Gina Lee

Investing.com – The dollar was down on Monday morning in Asia, with investors continuing to put pressure on the safe-haven asset on the first trading day of 2021. Expectations that U.S. interest rates will remain low and hopes for an eventual global economic recovery from COVID-19 will likely continue to slow the dollar down against other major currencies.

The that tracks the greenback against a basket of other currencies was down 0.25% to 89.677 by 8:56 PM ET (1:56 AM GMT), slightly below 89.766, where it ended 2020.

Trade is still thin as investors return from the holiday season, but some short sellers were already betting against the greenback and reversing the small bounce it enjoyed on the last trading day of 2020 when profit-taking lent support.

The Federal Reserve is due to release the minutes from its December meeting on Wednesday. Investors will be looking for more detail on the discussions about making their forward policy guidance more explicit and the chance of a further increase in asset buying in 2021.

The pair edged down 0.13% to 103.06. Japanese media reported that a state of emergency is being considered for Tokyo and could be declared within the week. With the city dealing with record levels of infections, investors will pay close attention to Prime Minister Yoshihide Suga’s news conference to mark the start of 2021, due to take place later in the day.

The pair edged up 0.16% to 0.7716 and the pair inched up 0.03% to 0.7199. The news from Japan saw the risk-sensitive Antipodean currencies steady after unwinding what would have been small earlier gains.

The pair edged down 0.10% to 6.5267. In China, the was released earlier in the day, with a reading of 53 for December. The figure was lower than the 54.8 in forecasts prepared by Investing.com and November’s 54.9 reading.

The yuan, now viewed as a favored vehicle for shorting the dollar as China’s economic recovery continues, climbed roughly 0.2 to 6.4927 per dollar in offshore trade, close to reaching a two-and-a-half-year low.

The pair inched up 0.09% to 1.3683. The pound also saw its gains capped as the number of COVID-19 cases continues to increase and U.K Prime Minister Boris Johnson warned on Sunday that tougher restrictions were likely on the way to curb the surge.

Across the Atlantic, all eyes are on the Jan. 5 runoff vote in the U.S. state of Georgia, which will determine which party controls the Senate and how successfully President-elect Joe Biden can implement his agenda.

Georgia has not elected a Democrat senator in two decades, with a victory of either or both Republican incumbents sealing a narrow majority in the Senate for the Republicans. However, if the Democrat candidates win, the dollar could be further weakened by the expected higher stimulus spending pushed by their party and the improved market sentiment.

Meanwhile, is also continuing an extraordinary rally, and was just below the record high of $34,800 seen on Sunday. It has gained more than 65% after crossing the $20,000-mark around two weeks ago and rose 300% in 2020.

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