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FOREX-Dollar gains after weeks of losses as investors focus on U.S. aid package

Mon, 10th Aug 2020 20:03

* U.S. fiscal stimulus boosts dollar
* Dollar rises to one-week high vs euro, Swiss franc
* Dollar poised for short-term correction -analyst
* Sino-U.S. tensions keep currency markets subdued
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout, updates prices, market activity and comments)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 10 (Reuters) - The dollar rose on Monday, including against major currencies such as the
euro and Swiss franc, as investors focused on the fiscal stimulus plan in the United States and U.S.-China
tensions ahead of key trade talks this week.
The greenback rose to one-week highs against the euro and Swiss currency.
The dollar index also recouped some losses from July when it fell 4%. Friday's data on the non-farm
payrolls report calmed fears about the U.S. labor market, but the dollar still posted its seventh straight
weekly decline.
After talks in Washington over the next round of fiscal stimulus broke down, U.S. President Donald
Trump signed executive orders on Saturday, partially restoring enhanced unemployment payments to millions
of jobless Americans.
"We didn't get the deal done in Capitol Hill last week, but President Trump was able to sign those
executive actions. So we're getting some stimulus, but not enough," said Ed Moya, senior market analyst at
OANDA in New York.
"Right now, you'll probably going to see a little more consolidation this week of the big FX moves.
But the longer-term outlook continues to be great on the euro, so you'll see people buying on dips," he
added.
In afternoon trading, the euro fell 0.3% against the dollar to $1.1746, while the U.S.
currency gained 0.3% versus the Swiss franc to 0.9152 franc.
Against the yen, the dollar was little changed at 105.93 yen.
Overall, the dollar index was up 0.2% at 93.56.
Shaun Osborne, chief FX strategist at Scotiabank in Toronto, said he believes the dollar will remain
weak in the medium term but not collapse. He sees the possibility of a short-term correction or at least
moderation.
"We think the fundamental backdrop that has provided support for the U.S. dollar in the past two years
is turning more adverse and investors will continue to seek better economic prospects or returns in
non-U.S. dollar markets in the coming months," Osborne wrote in his latest research note.
Speculators increased net short dollar positions in the latest week, according to weekly futures data
on Friday.
The dollar's strength at the end of last week was also due to escalating tensions between the United
States and China, with the U.S. imposing sanctions on top Hong Kong and Chinese officials.
This continued to drive investors towards the safe-haven dollar on Monday. China imposed sanctions on
11 U.S. citizens, including legislators.
Senior U.S. and Chinese officials will meet via teleconference on Saturday to review the
implementation of their Phase 1 trade deal and likely air mutual grievances.

========================================================
Currency bid prices at 2:51 PM (1851 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1745 $1.1786 -0.35% +4.77% +1.1801 +1.1741
Dollar/Yen JPY= 105.9300 105.9100 +0.02% -2.69% +106.1900 +105.7200
Euro/Yen EURJPY= 124.44 124.83 -0.31% +2.04% +124.8800 +124.3700
Dollar/Swiss CHF= 0.9152 0.9123 +0.32% -5.44% +0.9184 +0.9122
Sterling/Dollar GBP= 1.3069 1.3051 +0.14% -1.43% +1.3103 +1.3020
Dollar/Canadian CAD= 1.3353 1.3383 -0.22% +2.83% +1.3394 +1.3333
Australian/Doll AUD= 0.7151 0.7157 -0.08% +1.85% +0.7183 +0.7141
ar
Euro/Swiss EURCHF= 1.0751 1.0754 -0.03% -0.93% +1.0792 +1.0748
Euro/Sterling EURGBP= 0.8986 0.9030 -0.49% +6.29% +0.9038 +0.8979
NZ NZD= 0.6588 0.6602 -0.21% -2.20% +0.6611 +0.6579
Dollar/Dollar
Dollar/Norway NOK= 9.0331 9.0387 -0.06% +2.90% +9.0685 +8.9980
Euro/Norway EURNOK= 10.6085 10.6618 -0.50% +7.83% +10.6884 +10.6023
Dollar/Sweden SEK= 8.7476 8.7452 -0.36% -6.42% +8.7628 +8.7152
Euro/Sweden EURSEK= 10.2758 10.3132 -0.36% -1.85% +10.3220 +10.2711


(Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski and David Gregorio)

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