* EU deal cheered, although largely priced in
* Analysts say dollar set to struggle for now
* Commodity currencies soar as risk sentiment improves
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 21 (Reuters) - The euro on Tuesday climbed to its highest against the U.S. dollar since
January last year, after European Union countries struck an agreement on a massive stimulus plan to revive
their coronavirus-battered economies.
An upturn in sentiment following the EU deal lifted commodity currencies, which tend to benefit in
times of increased risk appetite. The Australian dollar rose to a 15-month high against the greenback, the
New Zealand currency climbed to a six-month peak, and the Canadian dollar advanced to its strongest level
in six weeks.
The EU deal - a compromise on concerns that thrifty northern states had about handouts for more their
more profligate neighbors - was hailed as an important signal of unity by Europe's leaders and a
foundation for economic recovery. "There was all this anticipation for this rescue package, which was almost guaranteed that it will
pass and when it did, it made everybody happy," said Juan Perez, currency trader at Tempus Inc in
Washington.
"And this kind of symbolizes the fact that the European Union is going to work together to achieve
fiscal integration for this rescue package. And it came to fruition," he added.
Encouraging results from several COVID-19 vaccine trials also boosted market sentiment and drove a
rally in global stock markets. In midday trading, the euro rose 0.6% to $1.1510, after earlier hitting $1.1516, EUR=EBS , the
highest level since Jan. 11, 2019 last year.
"I think with sentiment having swung to the euro's favor, that leaves the dollar vulnerable to selling
on rallies, and the euro a buy on dips," said Joe Manimbo, senior market analyst, at Western Union
Business Solutions in Washington.
"Above $1.15, that certainly could pave the way for $1.17 over the coming months," he added.
Against basket of major currencies, the dollar fell 0.5% was to 95.25 =USD , the lowest since early
March.
ING analysts said they are looking for "more gains to $1.20 later this year" as dollar weakness kicks
in because the recovery fund agreement is significant enough "not to prompt investors to exit their long
euro positions," particularly against the dollar, where the outlook has darkened for the rest of the year.
The Australian dollar was last up 1.4% at US$0.7113, also lifted after the central bank offered few
surprises in minutes from last month's meeting. AUD/
In a speech, Governor Philip Lowe said while he would prefer a cheaper Aussie dollar, its 27% recovery
from March lows was supported by fundamentals.
The New Zealand dollar rose 0.8% to US$0.6626 NZD=D3 .
The Canadian dollar strengthened 0.7% to C$1.3443 per U.S. dollar CAD=D3 .
The dollar fell 0.5% versus the yen to 107.77 yen JPY=EBS .
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Currency bid prices at 12:43PM (1643 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1508 $1.1444 +0.56% +2.66% +1.1516 +1.1424
Dollar/Yen JPY= 106.7500 107.2400 -0.46% -1.93% +107.3600 +106.7700
Euro/Yen EURJPY= 122.88 122.78 +0.08% +0.76% +123.0200 +122.4800
Dollar/Swiss CHF= 0.9331 0.9387 -0.60% -3.59% +0.9399 +0.9332
Sterling/Dollar GBP= 1.2740 1.2660 +0.63% -3.91% +1.2752 +1.2651
Dollar/Canadian CAD= 1.3436 1.3533 -0.72% +3.47% +1.3537 +1.3433
Australian/Doll AUD= 0.7112 0.7013 +1.41% +1.30% +0.7119 +0.7011
ar
Euro/Swiss EURCHF= 1.0742 1.0745 -0.03% -1.01% +1.0758 +1.0723
Euro/Sterling EURGBP= 0.9031 0.9035 -0.04% +6.83% +0.9050 +0.9002
NZ NZD= 0.6628 0.6574 +0.82% -1.59% +0.6636 +0.6560
Dollar/Dollar
Dollar/Norway NOK= 9.1194 9.2276 -1.17% +3.88% +9.2325 +9.1143
Euro/Norway EURNOK= 10.4964 10.5664 -0.66% +6.69% +10.5796 +10.4658
Dollar/Sweden SEK= 8.8888 8.9506 -0.35% -4.91% +8.9808 +8.8846
Euro/Sweden EURSEK= 10.2330 10.2692 -0.35% -2.26% +10.2813 +10.2170
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Euro vs U.S. dollar https://tmsnrt.rs/30wWQJh
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