* Focus on 1st U.S. presidential debate
* Options-related flows bet on dollar downside
* U.S. consumer confidence rises, lifts risk appetite
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Recasts, adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 29 (Reuters) - The dollar on Tuesday dropped from last week's two-month highs, as
investors capitalized on recent gains in the greenback and cautiously looked ahead to the first debate
between U.S. President Donald Trump and Democratic challenger Joe Biden.
The U.S. currency fell to one-week lows against the euro and Swiss franc, and dropped against
commodity currencies such as the Australian and New Zealand dollars as well as the Norwegian crown.
The 90-minute televised debate between the two U.S. presidential candidates at 9 p.m. EDT (0100 GMT)
will be watched by investors looking for guidance on the candidates' prospects.
"The debate is so much awaited because of all the political tensions going and also because
economically both candidates have different visions for the country," said Juan Perez, senior currency
trader, at Tempus Inc in Washington.
"There is a lot more volatility on the domestic side than on the international side. Global sentiment
is also a little better than that in the U.S. and so it's making sense that investors are moving away from
the U.S. dollar," he added.
In afternoon trading, the dollar index fell 0.3% to 93.879 , after hitting a two-month peak on
The greenback also added to losses, as investors felt a little more confident getting out of the
safe-haven currency after data showed U.S. consumer confidence rebounded more than expected in September,
as households' views of the labor market improved.
The dollar was also weighed down earlier by currency flows in the options market as well as for month
end, said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto.
The euro firmed across the board, rising 0.6% against the dollar to $1.1737, after hitting a
getting one-week peak. The single currency also climbed to a two-week high versus the yen, and was last
0.8% T 124.04 yen.
European Central Bank policymakers are increasingly divided over how to steer Europe's economy through
a second wave of COVID-19 infections.
The dollar fell to a one-week low against the Swiss franc and was last down 0.6% at 0.9194 franc
Markets were also waiting for developments in talks over aid for people affected by the coronavirus in
the United States.
U.S. House Speaker Nancy Pelosi said on Tuesday she hoped to have a coronavirus aid deal with the
White House this week, after speaking with Treasury Secretary Steve Mnuchin for about 50 minutes and
making plans for further talks on Wednesday.
Sterling, meanwhile, rose on hopes for a Brexit deal and the Bank of England's deputy governor saying
he thought the floor for the central bank's key interest rate was 0.1%.
The pound was last up 0.3% at $1.2867.
Currency bid prices at 3:27 PM (1927 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1739 $1.1664 +0.64% +4.72% +1.1745 +1.1662
Dollar/Yen JPY= 105.6500 105.4900 +0.15% -2.95% +105.7300 +105.3500
Euro/Yen EURJPY= 124.05 123.05 +0.81% +1.72% +124.1100 +123.0300
Dollar/Swiss CHF= 0.9192 0.9244 -0.56% -5.02% +0.9250 +0.9191
Sterling/Dollar GBP= 1.2866 1.2827 +0.30% -2.96% +1.2901 +1.2824
Dollar/Canadian CAD= 1.3387 1.3372 +0.11% +3.09% +1.3418 +1.3352
Australian/Doll AUD= 0.7131 0.7070 +0.86% +1.57% +0.7138 +0.7069
Euro/Swiss EURCHF= 1.0792 1.0782 +0.09% -0.55% +1.0817 +1.0781
Euro/Sterling EURGBP= 0.9123 0.9084 +0.43% +7.93% +0.9146 +0.9063
NZ NZD= 0.6589 0.6552 +0.56% -2.18% +0.6602 +0.6551
Dollar/Norway NOK= 9.4195 9.4832 -0.67% +7.30% +9.5060 +9.4181
Euro/Norway EURNOK= 11.0617 11.0634 -0.02% +12.44% +11.1033 +11.0395
Dollar/Sweden SEK= 8.9674 9.0355 -0.18% -4.07% +9.0522 +8.9662
Euro/Sweden EURSEK= 10.5285 10.5480 -0.18% +0.57% +10.5670 +10.5180
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Elizabeth Howcroft in London, Editing by
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