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FOREX-Dollar beats euro for first week since mid-June after bullish data

Fri, 21st Aug 2020 20:19

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

(Adds U.S. data, quote, updates prices)
By Kate Duguid and Karen Brettell
NEW YORK, Aug 21 (Reuters) - The U.S. dollar on Friday
gained against the euro for the first week since mid-June after
data showed a strong uptick in U.S, business activity, while the
single currency was held down as an August batch of European
business surveys pointed to a stuttering economic recovery.
U.S. business activity snapped back to the highest since
early 2019 this month as companies in both the manufacturing and
services sectors saw a resurgence in new orders even as new
COVID-19 cases remain stubbornly high across the country.

“The Markit PMI flash readings show the U.S. is
outperforming Europe,” said Edward Moya, senior market analyst
at OANDA in New York.
The data contrasted with weakness in the euro zone, as the
pent-up demand unleashed last month by the easing of coronavirus
lockdowns dwindled.
"Clearly the PMI numbers this morning suggest that Europe is
losing a little momentum here and that we're seeing some
turbulence in other areas of the global economy. So that is
weighing on the performance gap between the U.S. and its major
counterparts," said Karl Schamotta, chief market strategist at
Cambridge Global Payments.
The euro dipped to a one-week low of $1.175 against
the greenback earlier, before rising back to $1.179, down 0.61%
on the day.
The greenback escaped a ninth consecutive weekly decline
that would marked the longest losing streak since the summer of
2010 and a run that has only happened five times since 1990.
The recovery in the dollar began on Wednesday after the
Federal Open Market Committee released minutes from its last
meeting, the tone of which was more dovish than expected. The
minutes prompted dollar bears to buy into the heavily shorted
currency, fueling its biggest one-day surge in more than two
Bears have reaped rich returns from shorting the greenback
in recent weeks as the United States has struggled to tame the
coronavirus pandemic and the unprecedented policy stimulus
unleashed by the Fed had darkened the outlook for the safe-haven
"You're seeing a bit of an unwind in the short dollar trade
that had gained so much momentum in the last couple months,"
said Schamotta.
The dollar index against a basket of major currencies
was last up 0.60% at 93.24.

Currency bid prices at 3:00PM (1900 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR= $1.1787 $1.1859 -0.61% +5.15% +1.1882 +1.1755
Dollar/Yen JPY= 105.8000 105.7900 +0.01% -2.81% +106.0700 +105.4500
Euro/Yen EURJPY= 124.72 125.46 -0.59% +2.27% +125.5500 +124.4500
Dollar/Swiss CHF= 0.9122 0.9076 +0.51% -5.75% +0.9139 +0.9062
Sterling/Dollar GBP= 1.3092 1.3212 -0.91% -1.26% +1.3255 +1.3060
Dollar/Canadian CAD= 1.3189 1.3182 +0.05% +1.56% +1.3234 +1.3159
Australian/Doll AUD= 0.7160 0.7191 -0.43% +1.98% +0.7215 +0.7140
Euro/Swiss EURCHF= 1.0753 1.0763 -0.09% -0.91% +1.0778 +1.0737
Euro/Sterling EURGBP= 0.9002 0.8973 +0.32% +6.48% +0.9016 +0.8945
NZ NZD= 0.6536 0.6533 +0.05% -2.97% +0.6549 +0.6518
Dollar/Norway NOK= 9.0152 8.9176 +1.09% +2.70% +9.0615 +8.8795
Euro/Norway EURNOK= 10.6260 10.5776 +0.46% +8.06% +10.6610 +10.5518
Dollar/Sweden SEK= 8.7941 8.7023 +0.30% -5.92% +8.8168 +8.6912
Euro/Sweden EURSEK= 10.3665 10.3350 +0.30% -0.98% +10.3735 +10.3249

(Reporting by Kate Duguid in New York and Tommy Wilkes in
London; Editing by Steve Orlofsky and Cynthia Osterman)

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