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FOREX-Safe haven dollar dips on hopes for U.S. stimulus deal

Mon, 19th Oct 2020 15:22

By John McCrank
NEW YORK, Oct 19 (Reuters) - The dollar edged lower on
Monday as investors revived bets that an agreement in Washington
on a fiscal stimulus package could be reached ahead of the
upcoming U.S. election, and on hopes of a coronavirus vaccine by
year-end.
The dollar index was down 0.45%, giving back some of
its 0.7% rise from last week when a global surge in coronavirus
cases and an impasse over the stimulus package stoked caution.
The move out of the safe-haven greenback came after House
Speaker Nancy Pelosi said that, while differences remained with
President Donald Trump's administration on a wide-ranging
coronavirus relief package, she believed legislation could be
pushed through before Election Day.
"There is growing optimism that there is going to be one
last strong attempt to get a stimulus deal," said Edward Moya,
senior market analyst at Oanda in New York.
Boosting overall sentiment, drugmaker Pfizer Inc
said on Friday it could have a coronavirus vaccine ready in the
United States by the end of the year.
Asia's trade-exposed currencies held firm on Monday as data
showed China's economic rebound from the pandemic accelerated in
the third quarter, with the yuan surging to a fresh 1-1/2-year
high against the dollar.
China's gross domestic product grew 4.9% in July-September
from a year earlier, slower than analysts' forecast, but faster
than the second quarter and helped by strong gains in industrial
output and an acceleration in retail sales.
The Chinese currency touched 6.6737 against the U.S. dollar
in the offshore market, its strongest since March
2019, before edging back 0.35%.
The yuan has benefited in the last few months from hopes of
a Joe Biden win in the U.S. presidential election, as he is seen
as less of a threat to U.S.-China relations.
Lee Hardman, currency analyst at MUFG, said "the renminbi,
other Asian and commodity-related currencies should continue to
benefit," noting that the spread of COVID-19 in Asia remains
more contained than in the rest of the world and that points to
"a continuation of cyclical outperformance" there.
The Australian dollar was 0.35% higher at $0.7102
and the New Zealand dollar rose 0.53% to $0.6641.
New Zealand Prime Minister Jacinda Ardern won re-election on
Saturday, delivering the biggest election victory for her
center-left Labour Party in half a century.
Euro/dollar rose 0.55% to $1.1782, while
dollar/yen dipped 0.03% to 105.38.
Elsewhere, sterling rose 0.64% versus the dollar to $1.30
.
========================================================
Currency bid prices at 9:43AM (1343 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1782 $1.1718 +0.55% +5.09% +1.1789 +1.1704
Dollar/Yen 105.3750 105.3950 -0.03% -3.00% +105.4950 +105.3500
Euro/Yen 124.14 123.48 +0.53% +1.80% +124.1900 +123.3700
Dollar/Swiss 0.9095 0.9152 -0.62% -6.01% +0.9165 +0.9095
Sterling/Dollar 1.3004 1.2920 +0.64% -1.96% +1.3016 +1.2888
Dollar/Canadian 1.3155 1.3184 -0.20% +1.28% +1.3191 +1.3156
Aussie/Dollar 0.7102 0.7078 +0.35% +1.22% +0.7115 +0.7073
Euro/Swiss 1.0715 1.0716 -0.01% -1.26% +1.0728 +1.0716
Euro/Sterling 0.9058 0.9071 -0.14% +7.13% +0.9089 +0.9024
NZ 0.6641 0.6605 +0.53% -1.32% +0.6645 +0.6605
Dollar/Dollar
Dollar/Norway 9.2850 9.3855 -0.96% +5.97% +9.3800 +9.2700
Euro/Norway 10.9403 10.9875 -0.43% +11.21% +10.9953 +10.9228
Dollar/Sweden 8.7880 8.8475 -0.07% -5.98% +8.8578 +8.7824
Euro/Sweden 10.3535 10.3612 -0.07% -1.11% +10.3835 +10.3390


(Reporting by John McCrank; additional reporting by Olga Cotaga
Editing by Nick Zieminski)

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