* Euro falls after German court ruling
* Dollar gains after better-than-expected U.S. data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Recasts, adds comments, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 5 (Reuters) - The dollar rose for a third session against most major currencies on
Tuesday, in line with U.S. stocks, bolstered by the prospect of reopenings in some American states and
countries around the world, as well as U.S. services data that was stronger than market expectations.
Some analysts said since the onset of the coronavirus pandemic in March, the dollar has developed a
positive correlation with U.S. stocks. Typically, the dollar tends to rally when stocks are down and
financial markets are under stress.
The dollar is still a safe haven and gains when there is chaos in the market. But when it moves in
tandem with risk assets, analysts are no longer surprised.
"There has been a disconnect between equities and economics," said Mazen Issa, senior FX strategist at
TD Securities in New York. "So even though there is a risk rally today, the dollar's performance, in large
part, is tied to relative equity performance."
U.S. stocks gained on Tuesday, as did crude futures CLc1 , which advanced 20%, with Brent LCOc1 up
around 12% as production fell and countries around the globe, including Italy, Finland and several U.S.
states, eased lockdown restrictions. O/R
"This is the situation we're in right now," said Issa. "With very low yields, investment alternatives
are few and far between and so what it does mean is that the U.S equity market, much like the dollar, is
more defensively structured in terms of its sectoral compositions," Issa said.
The greenback's gains came at the expense of the euro, which weakened broadly after a German
constitutional court ruled that the Bundesbank must stop buying government bonds if the European Central
Bank cannot prove those purchases are needed.
The decision did not apply to the ECB's latest pandemic-fighting program, a 750 billion-euro scheme to
prop up the economy, but the ruling unsettled financial markets, which had been calmed by aggressive ECB
asset purchases aimed at preventing the pandemic leading to an economic meltdown.
The dollar, meanwhile, edged higher after data showed a better-than-expected reading for the U.S.
services sector in April. The U.S. Institute for Supply Management's non-manufacturing index fell to 41.8
last month, from 52.5 in March, but the April level was higher than the consensus forecast of
36.8. In afternoon trading, the dollar index =USD was up 0.2% at 99.714 =USD .
The euro, meanwhile, fell 0.5% to $1.0850 EUR=EBS in the wake of the German court ruling.
The dollar gained 0.7% versus the Swiss franc, another safe-haven currency, to 0.9721 franc CHF=EBS ,
but slipped 0.3% against the yen to 106.450 yen JPY=EBS .
Commodity currencies rose with higher risk appetite, with the Australian dollar AUD=D3 up 0.6% at
64.57 U.S. cents. It also rose after the Reserve Bank of Australia left its targets for the cash rate and
three-year government bond yields unchanged at 0.25%.
Trading was light because of public holidays in Japan and China. The yuan CNH=D3 rose 0.2% to 7.1170
per dollar in offshore trade, recovering from a six-week low of 7.1560 hit in the previous session but
well below its range last month.
========================================================
Currency bid prices at 3:10PM (1910 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0848 $1.0906 -0.53% -3.23% +1.0925 +1.0827
Dollar/Yen JPY= 106.4500 106.7300 -0.26% -2.20% +106.8900 +106.4300
Euro/Yen EURJPY= 115.50 116.38 -0.76% -5.29% +116.5600 +115.4200
Dollar/Swiss CHF= 0.9721 0.9649 +0.75% +0.43% +0.9734 +0.9647
Sterling/Dollar GBP= 1.2446 1.2442 +0.03% -6.13% +1.2483 +1.2422
Dollar/Canadian CAD= 1.4025 1.4083 -0.41% +8.00% +1.4094 +1.4007
Australian/Doll AUD= 0.6458 0.6426 +0.50% -8.02% +0.6476 +0.6418
ar
Euro/Swiss EURCHF= 1.0546 1.0527 +0.18% -2.82% +1.0553 +1.0519
Euro/Sterling EURGBP= 0.8714 0.8764 -0.57% +3.09% +0.8767 +0.8692
NZ NZD= 0.6070 0.6046 +0.40% -9.89% +0.6076 +0.6034
Dollar/Dollar
Dollar/Norway NOK= 10.2303 10.3065 -0.74% +16.54% +10.3520 +10.2271
Euro/Norway EURNOK= 11.1000 11.2650 -1.46% +12.83% +11.2708 +11.1017
Dollar/Sweden SEK= 9.8145 9.8512 -0.96% +5.00% +9.9051 +9.7999
Euro/Sweden EURSEK= 10.6487 10.7520 -0.96% +1.71% +10.7781 +10.6444
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro positions IMAGE https://tmsnrt.rs/2WnABDG
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>