FOREX-Dollar holds advantage as money flees from risk assets

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Dollar rallies this week against most currencies
* Risk assets in retreat due to coronavirus concerns
* Signs of stuttering global economy hurt sentiment
* Euro looks to Ifo survey amid growing economic gloom

By Stanley White
TOKYO, Sept 24 (Reuters) - The dollar held onto gains
against most currencies on Thursday as signs of an economic
slowdown in Europe and in the United States revived concerns
about the fallout from a second wave of coronavirus infections.
The euro, already hit by worries about a return to severe
lockdown restrictions, faces an additional hurdle later on
Thursday with the release of data on German business sentiment.
The dollar is likely to continue to rise as another spike in
coronavirus cases in Europe boosts its safe-haven appeal, while
Federal Reserve policymakers called on the U.S. government to
provide more fiscal support. "Risk is being sold across the board, and there is a big
unwinding of dollar shorts," said Yukio Ishizuki, foreign
exchange strategist at Daiwa Securities, referring to investors
abandoning bearish dollar bets.
"Questions surrounding the coronavirus and the need for even
more stimulus are turning flows back to the dollar."
The dollar traded at $1.1671 per euro EUR=D3 on Thursday
in Asia, just shy of a two-month high reached on Wednesday.
The greenback held near a nine-week high against the Swiss
franc CHF=EBS at 0.9225, and also held on to gains made in the
previous session against the Japanese currency, to stand at
105.42 yen JPY=D3 .
The pound GBP=D3 bought $1.2732, near its weakest level
against the U.S. currency since late July.
The dollar has rallied this week as rising coronavirus
infections in Europe and Britain undermined investor optimism
about a vaccine progress.
The Ifo survey due later on Thursday is forecast to show an
improvement in the business morale in Germany, Europe's largest
economy.
However, sentiment for the euro has already suffered a big
blow after surveys released on Wednesday showed new restrictions
to quell a resurgence in coronavirus infections slammed the euro
zone's services industry into reverse. Appetite for riskier assets also soured after data on
Wednesday showed U.S. business activity slowed in September and
several Fed policymakers said that further government aid is
needed to bolster the economy. The dollar index =USD stood at 94.302 against a basket of
six major currencies on Thursday, close to a nine-week high.
There are no major economic data releases scheduled during
the Asian session, so trading could be subdued, analysts said.
In the onshore market, the yuan CNY=CFXS held steady at
6.8145 per dollar.
China's foreign exchange regulator granted fresh quotas
under its outbound investment scheme for the first time since
April 2019, official data showed, which allows domestically
registered financial firms to invest in overseas markets.
The $3.36 billion worth of quotas come as the yuan has
strengthened against the dollar over the past weeks amid
accelerating foreign money inflows. Some investors are watching the Australian and New Zealand
dollars, which have come under pressure on growing expectations
their central banks could deliver more monetary stimulus.
A recent decline in commodity prices is expected to increase
downside risks for the Antipodean currencies, some traders say.
The Aussie AUD=D3 traded at $0.7063, near its weakest
since July 21.
Across the Tasman Sea, the kiwi NZD=D3 bought $0.6543
after tumbling by 1.3% in the previous session, when the central
bank hinted at further monetary easing.