* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, March 23 (Reuters) - The dollar erased most of its
early losses and rose towards a three-year high on Monday as a
global selloff in stocks rippled over into early European
trading, burnishing the safe-haven appeal of the greenback.
A 9% rally in the value of the greenback against its major
rivals over the past two weeks came to a brief halt on Friday
after major central banks stepped up their dollar injection
facilities to tide over a global scramble for funding.
But Monday's Asian market trading brought a fresh round of
problems with stock markets collapsing and raising concerns that
global central banks' actions are not enough.
"The result is that the banking system simply doesn't have
enough dollars to lend to everyone who wants to borrow them
now..For now, it seems that the demand for the U.S. dollar is
insatiable," said Marshall Gittler, head of investment research
at BDSwiss Group.
Against a basket of its rivals =USD , the greenback was
broadly steady at 102.38 after falling as much as 0.7% in early
Asian trading. On Friday, it hit a January 2017 high of 102.99.
Also fuelling the dollar's rise was a surprising turnaround
in broader dollar positions among hedge funds to a net short bet
from an overall long bet, according to latest positioning data.
That raised speculation that the dollar's rally could be
partially explained by short-position covering by traders.
Though legislators in Washington were unable to clear U.S.
stimulus measures on Sunday as Republicans and Democrats tussled
over the details of a proposed $1 trillion spending package,
stoking disquiet about the dollar's gains, analysts said the
majority of investors preferred to hold cash.
"We've moved from risk-off to a phase where major players
are competing with each other for the safety of holding dollars
in cash," said Yukio Ishizuki, FX strategist at Daiwa Securities
in Tokyo. "There are still a lot of investors who need to sell
riskier assets, and they want to hold their money in dollars."
Against the yen JPY=EBS , the U.S. currency bounced between
gains and losses but last traded down 0.6% at 110.07.
The dollar initially rose against the euro EUR=EBS to the
strongest since April 2017 but then pared gains to trade 0.4%
lower at $1.0742 per euro.
Apart from the yen, the dollar closed in on multi-year highs
against the Australian AUD=D3 and New Zealand NZD=D3 dollars
as the economic costs of self-isolation triggered the largest
intraday decline ever in New Zealand shares.
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USdpositions https://reut.rs/3doNKUA
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