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FOREX-Dollar slips vs most currencies on U.S. stimulus expectations

Published 2020-10-01, 10:54 a/m
© Reuters.
EUR/USD
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USD/JPY
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USD/NOK
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WFC
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DX
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* Mnuchin, Pelosi try to hammer out stimulus plan

* U.S. data mixed overall, little dollar impact

* Chinese yuan rises to year-and-a-half high vs dollar

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds new comments, U.S. data, FX table, updates prices, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, Oct 1 (Reuters) - The dollar slipped against major currencies on Thursday in volatile trading, as hopes for U.S. fiscal stimulus cheered investors and spurred them to seek higher-yielding but riskier currencies.

The Chinese yuan gained the most against the dollar, reaching a year-and-a-half high in the offshore market, as a holiday in China dried up liquidity, exaggerating the moves.

In addition, Chinese data on Wednesday showed its economic recovery was on track. currencies such as the Australian, New Zealand, and Canadian dollars as well as the Norwegian crown also rose versus the greenback.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were expected to try again on Thursday to reach a deal on COVID-19 relief, while the House of Representatives stood ready for a second day to move a Democratic bill if talks fail. raised hopes of an agreement by telling reporters that Wednesday's discussions had made "a lot of progress in a lot of areas."

"The market is latching on to renewed hopes for a stimulus deal," said Erik Nelson, macro strategist, at Wells Fargo (NYSE:WFC) in New York. "Those stimulus hopes seem to be driving much of today's macro price action."

Wall Street shares were higher on the day, while U.S. Treasury prices were lower.

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In mid-morning trading, the euro rose 0.1% against the dollar to $1.1721 EUR=EBS .

The Australian dollar rose 0.1% against the greenback to US$0.7168 AUD=D3 . The New Zealand dollar gained 0.3% to US$0.6631 NZD=D3 . Against the Canadian dollar, the U.S. dollar slipped 0.1% C$1.3314 CAD=D3 .

The dollar index was little changed at 93.851 =USD , after earlier falling to 93.522, its weakest level since Sept. 22.

That said, analysts remained skeptical about the dollar's weakness and looked to fade the moves in risk assets overall.

"From a global macro perspective, the outlook is very much uncertain going into the colder winter months," said Simon Harvey, FX market analyst, at Monex Europe in London.

"There is heightened possibility, especially in Europe, for more localized lockdowns. And that kind of risk-off filtering into the dollar is very much alive and kicking," he added.

Thursday's U.S. data had minimal impact on currencies. If anything, they affirmed the tentative nature of recovery in the world's largest economy.

Data showed the number of Americans filing new claims for jobless benefits fell last week but remained at recession levels, while personal income dropped in August, underscoring the need for another government rescue package for businesses and the unemployed. construction spending increased more than expected in August as historically low interest rates boosted homebuilding, but manufacturing activity unexpectedly slowed in September as new orders retreated from a more than 16-1/2-year high. the dollar fell to 6.7306 yuan CNH=EBS in the offshore market, its lowest since early May 2019. It was last down 0.5% at 6.754 yuan.

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Currency bid prices at 10:33AM (1433 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=

$1.1736

$1.1718

+0.15%

+4.69%

+1.1769

+1.1718 Dollar/Yen

JPY=

105.6600

105.4500

+0.20%

-2.94%

+105.7400 +105.4100 Euro/Yen

EURJPY=

124.02

123.56

+0.37%

+1.70%

+124.2000 +123.6000 Dollar/Swiss

CHF=

0.9189

0.9207

-0.20%

-5.05%

+0.9215

+0.9165 Sterling/Dollar GBP=

1.2885

1.2916

-0.24%

-2.82%

+1.2978

+1.2821 Dollar/Canadian CAD=

1.3308

1.3319

-0.08%

+2.48%

+1.3327

+1.3279 Australian/Doll AUD=

0.7169

0.7161

+0.11%

+2.11%

+0.7209

+0.7155 ar

Euro/Swiss

EURCHF=

1.0785

1.0791

-0.06%

-0.62%

+1.0805

+1.0767 Euro/Sterling

EURGBP=

0.9106

0.9071

+0.39%

+7.71%

+0.9156

+0.9062 NZ

NZD=

0.6635

0.6610

+0.38%

-1.50%

+0.6656

+0.6606 Dollar/Dollar

Dollar/Norway

NOK=

9.3308

9.3300

+0.01%

+6.29%

+9.3500

+9.2525 Euro/Norway

EURNOK=

10.9530

10.9369

+0.15%

+11.33%

+10.9640

+10.8626 Dollar/Sweden

SEK=

8.9477

8.9544

+0.09%

-4.28%

+8.9645

+8.8994 Euro/Sweden

EURSEK=

10.5038

10.4945

+0.09%

+0.33%

+10.5137

+10.4716

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