FOREX-Dollar slides as U.S. stocks rally, but sentiment cautious

Published 09/07/2020, 12:51 am
Updated 09/07/2020, 12:54 am
© Reuters.
EUR/USD
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USD/JPY
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USD/CHF
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USD/NOK
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USD/CNY
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DX
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* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

* Euro extends gains vs dollar

* Commodity currencies rise vs dollar

* Sterling rises after Britain unveils stimulus package (Adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, July 8 (Reuters) - The dollar fell on Wednesday, tempering its safe-haven appeal for now, as U.S. stocks rallied, although sentiment remained cautious amid a resurgence of new coronavirus cases globally, particularly in the United States.

Demand for the U.S. currency proved remarkably stable as oil prices steadied while European bourses traded in negative territory.

"The buck tends to struggle when Wall Street rallies," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

He added that currencies have largely consolidated given the "the back and forth of optimism over the economic outlook."

The dollar is typically seen as a safe haven for investors to park their cash each time a resurgence of the pandemic seems to threaten a global economic recovery.

Against a basket of its rivals, the dollar =USD index dropped 0.5% to 96.527.

The euro EUR=EBS rose 0.6% versus the dollar to $1.1337 marginally, while a recent fall in selling positions against the greenback provided room for possible further drops.

Commodity currencies, which tend to thrive in times of increased risk appetite, also gained against the dollar.

The Australian dollar rose 0.4% against the greenback to US$0.6971 AUD=D3 . The New Zealand dollar NZD=D3 grew 0.2% to US$0.6566, with the Canadian dollar CAD=D3 rising 0.5% to C$1.3543 per U.S. dollar.

"I think in the absence of any pro-growth news, the virus count will be the one statistic that pops out from everyone's screens", said Marshall Gittler, head of investment research at BDSwiss, noting that while it may seem counterintuitive, rising U.S. cases often encourage investors to buy the dollar.

Against the safe-haven yen, the dollar was slightly down on the day at 107.44 yen JPY=EBS . The greenback was also 0.5% lower versus the Swiss franc at 0.9382 CHF=EBS .

Sterling GBP=D3 shrugged off earlier losses and rose 0.4% to $1.2588, after British finance minister Rishi Sunak promised 30 billion pounds ($37.7 billion) to head off an unemployment crisis by paying companies to bring back furloughed workers and cutting taxes for hospitality firms and homebuyers. the onshore yuan CNY=CFXS was stable at 7.0129, halting a two-day rally, after the Chinese central bank's daily midpoint for the currency was set at a weaker than expected level.

Other Asian currencies straddled narrow ranges as a resurgence of coronavirus cases threatened a return of lockdown restrictions, leaving investors fretting about the mounting economic costs of the pandemic.

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Currency bid prices at 10:43AM (1443 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=

$1.1338

$1.1270

+0.60%

+1.14%

+1.1342

+1.1264 Dollar/Yen

JPY=

107.4400

107.5100

-0.07%

-1.30%

+107.7000 +107.4300 Euro/Yen

EURJPY=

121.83

121.20

+0.52%

-0.10%

+121.8800 +121.1500 Dollar/Swiss

CHF=

0.9376

0.9421

-0.48%

-3.12%

+0.9432

+0.9376 Sterling/Dollar GBP=

1.2588

1.2540

+0.38%

-5.06%

+1.2595

+1.2510 Dollar/Canadian CAD=

1.3538

1.3602

-0.47%

+4.25%

+1.3623

+1.3535 Australian/Doll AUD=

0.6967

0.6946

+0.30%

-0.77%

+0.6974

+0.6928 ar

Euro/Swiss

EURCHF=

1.0633

1.0623

+0.09%

-2.02%

+1.0640

+1.0616 Euro/Sterling

EURGBP=

0.9006

0.8987

+0.21%

+6.53%

+0.9010

+0.8976 NZ

NZD=

0.6566

0.6546

+0.31%

-2.52%

+0.6569

+0.6531 Dollar/Dollar

Dollar/Norway

NOK=

9.4087

9.4714

-0.66%

+7.18%

+9.5144

+9.4036 Euro/Norway

EURNOK=

10.6715

10.7055

-0.32%

+8.47%

+10.7310

+10.6653 Dollar/Sweden

SEK=

9.1858

9.2630

-0.22%

-1.73%

+9.2737

+9.1816 Euro/Sweden

EURSEK=

10.4183

10.4416

-0.22%

-0.49%

+10.4470

+10.4090

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