(Adds U.S. data, analyst comments, updates prices)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Karen Brettell
NEW YORK, July 28 - The dollar index bounced off a two-year
low on Tuesday but looked primed for further weakness as the
United States continued to see a rise in coronavirus cases,
while the Federal Reserve is expected to maintain very loose
monetary policies.
The dollar index against a basket of currencies =USD
gained 0.18% to 93.71, after dropping to 93.47 on Monday, the
lowest since June 2018.
“I think the market is just taking a pause, it's been a
fairly relentless dollar selloff,” said Vassili Serebriakov, an
FX strategist at UBS in New York.
The continued spread of coronavirus is hampering the U.S.
economic recovery, while regions like Europe appear to have the
virus contained.
“The global economy has been recovering from COVID somewhat
unevenly, but I think the base of the recovery in places like
Europe and China is looking more encouraging than in the U.S.,”
said Serebriakov. “The dollar is countercyclical, so when the
global economy picks up the dollar tends to weaken.”
Florida reported a record one-day rise in coronavirus deaths
on Tuesday, and cases in Texas passed the 400,000 mark.
Republicans in the U.S. Senate pushed back on Tuesday
against their own party's $1 trillion coronavirus relief
proposal, the day after it was unveiled by Majority Leader Mitch
McConnell. Data on Tuesday showed that U.S. consumer confidence fell
more than expected in July. The euro EUR= dipped 0.26% against the dollar to $1.1720,
after reaching $1.1781 on Monday, the highest since September
2018.
Ultra-loose Fed policy is also weighing on the U.S.
currency.
Investors will be watching for any indicatons that the U.S.
central bank will increase its purchases of longer-dated debt,
implement yield caps or target higher inflation than it has
previously indicated when it concludes its two-day meeting on
Wednesday.
Goldman Sachs on Tuesday noted that a potential Fed shift
"towards an inflationary bias" along with record high debt
levels by the United States government are raising "real
concerns around the longevity of the U.S. dollar as a reserve
currency."
The dollar remained weak against several currencies on
Tuesday.
It dipped 0.29% to 105.06 yen JPY= , after earlier getting
as low as 104.94 yen, the weakest since March 13.
Sterling gained 0.49% to $1.2944, the highest since March
11.
========================================================
Currency bid prices at 3:39PM (1939 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1720 $1.1751 -0.26% +4.55% +1.1773 +1.1700
Dollar/Yen JPY= 105.0600 105.3700 -0.29% -3.49% +105.6800 +104.9600
Euro/Yen EURJPY= 123.14 123.81 -0.54% +0.98% +123.9800 +123.0200
Dollar/Swiss CHF= 0.9172 0.9197 -0.27% -5.23% +0.9227 +0.9156
Sterling/Dollar GBP= 1.2944 1.2881 +0.49% -2.38% +1.2952 +1.2839
Dollar/Canadian CAD= 1.3365 1.3354 +0.08% +2.92% +1.3406 +1.3331
Australian/Doll AUD= 0.7161 0.7149 +0.17% +1.99% +0.7176 +0.7114
ar
Euro/Swiss EURCHF= 1.0751 1.0808 -0.53% -0.93% +1.0827 +1.0744
Euro/Sterling EURGBP= 0.9052 0.9120 -0.75% +7.07% +0.9138 +0.9054
NZ NZD= 0.6658 0.6682 -0.36% -1.16% +0.6702 +0.6634
Dollar/Dollar
Dollar/Norway NOK= 9.1154 9.0924 +0.25% +3.84% +9.1520 +9.0495
Euro/Norway EURNOK= 10.6865 10.6835 +0.03% +8.63% +10.7195 +10.6548
Dollar/Sweden SEK= 8.7739 8.7183 +0.18% -6.14% +8.7922 +8.7142
Euro/Sweden EURSEK= 10.2860 10.2671 +0.18% -1.75% +10.2966 +10.2584
(Editing by Marguerita Choy and Cynthia Osterman)