(Updates prices, adds commentary, changes byline, previous dateline London)
* Dollar off two-month high after best week in almost six months
* Big net short dollar position points to chance of further rise
* Euro bounces from two-month low
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Chuck Mikolajczak
NEW YORK, Sept 28 (Reuters) - The dollar retreated from a two-month high against a basket of currencies on Monday as equities rallied after four straight weeks of declines ahead of a busy week of economic data and political developments in the United States.
A rebound in U.S. stocks at the end of last week helped slow the climb of the dollar, considered a safe haven, but signs of a slowdown in the nascent recovery from the pandemic and political uncertainties have kept investors on the defensive.
Major indexes on Wall Street were up more than 1% as stocks rebounded following four straight weeks of declines, the longest such streak for the S&P 500 .SPX and Dow Industrials (.DJI> in over a year. dollar as of several months ago has been trading in tandem with the equity markets, when equities goes up, the dollar goes down," said Axel Merk, president of Merk Investments and portfolio manager of the Merk Hard Currency Fund in Palo Alto, California.
"The dollar has been acting like a funding currency, basically when the world is reflating, when risk assets go up, when equities go up, then the dollar is weakening."
The dollar index slipped as low as 94.155 =USD on the day and last fell 0.317%, on pace for its biggest daily percentage drop in about three weeks. The greenback reached a two-month high of 94.745 last week and posted its biggest weekly rise since early April. Against the yen, the dollar was more subdued at 105.45 yen JPY= .
Sterling GBP= was last trading at $1.2849, up 0.89% on hopes Britain could secure a Brexit trade deal with the EU. euro EUR= gained 0.31% to $1.1666 after dropping to $1.16125 on Friday, its lowest in two months.
Even with Monday's softening, Friday's data on U.S. currency futures positions suggested the dollar had room to rise further, with speculators holding a big net short position in the currency which they could move to cover if the dollar moves higher. Commodity Futures Trading Commission's broad measure of dollar positioning showed speculators' net short position rose to $33.989 billion last week NETUSDALL= , up from $31.524 billion the week before and near its highest in almost a decade. flip side of that was a large net long position in the euro, which inched up last week to $27.922 billion EURNETUSD= .
Investor attention may now turn to the first U.S. presidential debate on Tuesday.
Meanwhile, worries abound that the economic recovery is stalling as many stimulus programs have expired, curbing consumer spending. On Sunday, U.S. House Speaker Nancy Pelosi said she thought a deal could be reached with the White House on a fresh coronavirus relief package as talks continued. week will bring more data on the health of the world's biggest economy, including consumer confidence on Tuesday, a manufacturing survey and consumer data on Thursday, and jobs figures on Friday.
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Currency bid prices at 2:44PM (1844 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=
$1.1666
$1.1630
+0.31%
+4.07%
+1.1678
+1.1616 Dollar/Yen
JPY=
105.5100
105.6000
-0.09%
-3.08%
+105.6800 +105.2700 Euro/Yen
EURJPY=
123.09
122.76
+0.27%
+0.93%
+123.1500 +122.4000 Dollar/Swiss
CHF=
0.9239
0.9284
-0.48%
-4.54%
+0.9295
+0.9243 Sterling/Dollar GBP=
1.2849
1.2736
+0.89%
-3.09%
+1.2925
+1.2747 Dollar/Canadian CAD=
1.3368
1.3384
-0.12%
+2.94%
+1.3403
+1.3353 Australian/Doll AUD=
0.7074
0.7027
+0.67%
+0.75%
+0.7074
+0.7009 ar
Euro/Swiss
EURCHF=
1.0782
1.0801
-0.18%
-0.65%
+1.0829
+1.0774 Euro/Sterling
EURGBP=
0.9078
0.9123
-0.49%
+7.38%
+0.9124
+0.9056 NZ
NZD=
0.6558
0.6542
+0.24%
-2.64%
+0.6567
+0.6530 Dollar/Dollar
Dollar/Norway
9.4698
9.5720
-1.07%
+7.88%
+9.5899
+9.4575 Euro/Norway
EURNOK=
11.0480
11.1346
-0.78%
+12.30%
+11.1556
+11.0387 Dollar/Sweden
SEK=
9.0417
9.1281
-0.56%
-3.27%
+9.1429
+9.0248 Euro/Sweden
EURSEK=
10.5501
10.6096
-0.56%
+0.77%
+10.6295
+10.5300
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Dollar hovers near 2-month high
https://tmsnrt.rs/3i6yOvv Dollar shorts near 9-year high
https://tmsnrt.rs/3cCMJIx
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>