FOREX-Concerns about U.S. recovery put dollar on defensive

* Dollar slips
* Commodity currencies stronger
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout; changes dateline, previous LONDON)
By Kate Duguid
NEW YORK, Aug 17 (Reuters) - The dollar traded lower on
Monday morning after weak results from a regional manufacturing
survey added to doubts sowed by grim data last week that the
U.S. recovery is on shaky grounds.
The New York Fed's Empire State business conditions index
fell to 3.7 in August versus 17.2 in July, and far lower than
the 15 points forecast by a Reuters survey of economists. The
reading indicates a slowdown in the manufacturing sector though
the results were partially offset by strong housing data
released earlier on Monday. U.S. homebuilder confidence rose for a third straight month
in August to match a record high as record-low interest rates
spur a surge in customer traffic, especially in suburban markets
that are growing in appeal as a result of the coronavirus
pandemic. Against a basket of currencies =USD the dollar traded
0.16% lower at 92.869, roughly in the middle of the range it has
held since dropping to a two-year low in late July.
The moves in the dollar index were muted as uncertainty kept
a lid on sentiment ahead of a week that includes the release of
minutes of the U.S. Federal Reserve's last policy meeting and
the U.S. Democratic Party's nominating convention.
"The U.S. dollar nursed a weak bias with attention on U.S.
politics and Fed policy," said Joe Manimbo, senior market
analyst at Western Union Business Solutions.
"The dollar favored the lower end of the range after U.S.
retail sales last week underwhelmed and increased doubts about
the durability of America's economic recovery from the
coronavirus-induced recession."
The United States and China postponed a Saturday review of
their Phase 1 trade deal, people familiar with the plans told
Reuters, citing scheduling conflicts. The delay in the review
bolstered the trade-sensitive Australian dollar. The Australian dollar AUD= inched up to a one-week high of
$0.723. The oil-sensitive Canadian dollar CAD= also edged
0.49% higher to C$1.320 per greenback.
Markets are also looking to the Fed minutes, due to be
released on Wednesday, for any clues about an anticipated shift
in the policy outlook.
Speculation is rife the U.S. central bank will adopt an
average inflation target, which would seek to push inflation
above 2% for some time to make up for the years it has run
below.