Stocks rally, bitcoin above $20,000

LONDON — Most stock markets advanced on Wednesday and bitcoin broke above $20,000 for the first time, as prospects brightened for more US economic stimulus and a Brexit trade deal.

Potential for an earlier EU rollout of coronavirus vaccines boosted investor's mood further.

The dollar faltered, however, as a surge in virus cases and further restrictive measures continued to drive a tug-of-war between long-term optimism and near-term pain.

Bitcoin, the leading virtual currency, traded above $20,000 for the first time, marking an astounding leap in the past year as financial markets developed more appetite for riskier assets.

Just 12 years old, bitcoin reached a record-high $20,787 before easing back to $20,612.

It has seen a meteoric rise since March, when it stood at $5,000, spurred by online payments giant PayPal saying it would enable account holders to use cryptocurrency.

The pound built on recent gains as British and European negotiators press on with talks on a post-Brexit trade deal.

Traders were awaiting the conclusion of the Federal Reserve's latest policy meeting, hoping for some guidance on its plans for monetary policy in the new year.

"Stock markets were off to a promising start in Europe and Wall Street is poised for small gains as negotiations on both sides of the pond see much needed progress," noted Craig Erlam, analyst at Oanda trading group.

After months of stuttering talks between lawmakers in Washington, there appear to be signs of progress on a new rescue package for the world's top economy.

Hopes that the EU economy can get back on track next year got a lift on Tuesday when the European Medicines Agency said it had brought forward a meeting to decide on authorising the Pfizer-BioNTech vaccine by more than a week to December 21.

The vaccine is already being administered in Britain, the US and Canada.

That came as the US Food and Drug Administration recommended experts give the go-ahead later this week to a second vaccine, produced by Moderna.

"Progress over an economic relief package in Washington, Brexit deal optimism that could settle by week's end, and the likely seamless rollout of multiple highly effective vaccines have mixed to paint trading screens Christmassy green," said Axi strategist Stephen Innes.

The need for a big rollout of the vaccine has been laid bare by soaring infection and death rates around the world, which have led governments to impose strict containment measures leading into the Christmas holidays.