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FOREX-Dollar squeezed as virus drives easing expectations

Published 2020-11-18, 07:38 p/m
© Reuters.
EUR/USD
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GBP/USD
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USD/JPY
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USD/CHF
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AUD/USD
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SOGN
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PFE
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WMB
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DX
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USD/CNH
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* Dollar index steady after five sessions of losses

* Yen claws back post-vaccine losses

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook

SYDNEY, Nov 19 (Reuters) - The dollar nursed losses after five sessions of decline and the yen held on to most of its recent gains on Thursday, as investors worried about rising coronavirus deaths and began to wager on more monetary stimulus from the U.S. Federal Reserve.

The dollar touched its lowest since early last week against a basket of currencies =USD overnight and has ceded ground broadly, even with equity markets slipping, as mixed economic data underscored the fragility of the U.S. recovery.

The dollar index is down about 0.2% for the week so far and, at 92.549, is less than 1% above a two-year low hit in September.

The safe-haven yen, meanwhile, has recouped almost three quarters of the steep loss it suffered last week when Pfizer (NYSE:PFE) announced its COVID-19 vaccine.

Moves in Asian morning trade were slight, with the yen JPY= a fraction weaker at 103.92 per dollar, but not far above an eight-month high of 103.18 made two weeks ago.

The New Zealand dollar NZD=D3 and Norwegian krone NOK=D3 likewise hung on to most of Wednesday's gains. The Aussie AUD=D3 lagged a little as a fresh coronavirus outbreak prompted a new hard lockdown in South Australia.

It was marginally softer at $0.7295, and saw no immediate boost from better-than-expected labour data.

"Central bankers continue to offer promises of almost endlessly easy money," said Societe Generale (PA:SOGN) currency strategist Kit Juckes.

"That, when U.S. COVID infection rates are causing enough concern about growth prospects to offset vaccine news, has kept the dollar on the backfoot, even as equities soften."

The largest public school district in the United States, in New York City, will halt in-person teaching from Thursday to try to curb COVID-19's spread, as U.S. deaths near a world-record of a quarter-million lives lost to the respiratory disease.

The United States remains in a "severe recession" and growth vulnerable to swings in infection rates, New York Federal Reserve President John Williams (NYSE:WMB) said on Wednesday, who reiterated the bank would use all its tools to help the economy. hopes of a post-Brexit trade deal have kept sterling supported, and the euro was steady, though both dipped slightly as the dollar held its ground in Asia on Thursday.

Sterling GBP= last traded 0.2% softer at $1.3234 and the common currency EUR= at $1.1839.

The Chinese yuan sat near a 29-month high in offshore trade CNH= .

U.S. jobs figures will be closely watched on Thursday for guidance on the Fed's next moves. At 1000 GMT European Central Bank President Christine Lagarde appears at a European Parliament Committee hearing in Frankfurt.

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Currency bid prices at 11:32AM in Sydney(0032 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1838

$1.1854

-0.13%

+5.59%

+1.1854

+1.1832 Dollar/Yen

JPY=D3

103.9150

103.8200

+0.09%

-4.33%

+103.9750 +103.7450 Euro/Yen

EURJPY=

123.02

123.05

-0.02%

+0.88%

+123.1200 +122.9900 Dollar/Swiss

CHF=EBS

0.9122

0.9112

+0.12%

-5.73%

+0.9125

+0.9114 Sterling/Dollar GBP=D3

1.3236

1.3268

-0.23%

-0.20%

+1.3268

+1.3230 Dollar/Canadian CAD=D3

1.3091

1.3085

+0.06%

+0.79%

+1.3096

+1.3077 Aussie/Dollar

AUD=D3

0.7295

0.7306

-0.14%

+3.97%

+0.7305

+0.7284 NZ

NZD=D3

0.6909

0.6923

-0.19%

+2.69%

+0.6924

+0.6910 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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