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FOREX-Dollar dips as risk appetite improves on strong earnings, stimulus hopes

Published 08/05/2020, 11:29 PM
Updated 08/05/2020, 11:30 PM
© Reuters.
DX
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* U.S. dollar index near more than 2-year low
* U.S. private payrolls miss expectations in July
* Euro zone PMIs showcase growth

(New throughout, updates prices, market activity, data and
comments; new byline)
By Caroline Valetkevitch
NEW YORK, Aug 5 (Reuters) - The U.S. dollar slipped against
basket of currencies on Wednesday as investors' appetite for
risk improved on strong corporate earnings and expectations of
more stimulus measures for the pandemic-ravaged global economy.
U.S. and European investors piled into stocks on Wednesday
as companies in both regions posted a batch of positive earnings
reports.
The dollar, a safe-haven currency, typically weakens when
investors grow more comfortable holding riskier assets.
On Wednesday, the U.S. Dollar Currency Index =USD , which
measures the greenback's strength against six major currencies,
was 0.536% lower at 92.652, just shy of a more than two year low
of 92.593 touched last week.
"Clearly we have seen risk appetite rebound on global
markets and sort of a return of the theme of a U.S.
underperformance relative to world counterparts," said Karl
Schamotta, chief market strategist at Cambridge Global Payments
in Toronto.
U.S. stocks also have grown cheaper for overseas investors
as the dollar has been pressured in recent weeks by worries
about the U.S. economic slide during the coronavirus pandemic.
The dollar fell further on Wednesday after the ADP National
Employment Report, which showed U.S. private payrolls growth
slowed sharply in July, suggesting a loss of momentum in the
labor market. "This morning's weak ADP data suggests we may see further
weakness when non-farm payrolls land on Friday," he said. "That
is weighing on the dollar's prospects relative to the other
majors."
Euro zone business activity returned to modest growth in
July as many curbs imposed to stop the spread of the coronavirus
were lifted, while official estimates showed retail sales
volumes rebounded in June. Investors also are watching negotiations between the White
House and congressional Democrats trying to reach a deal on a
relief package by the end of this week. Treasury Secretary
Steven Mnuchin said progress had been made. The Australian dollar AUD=D3 , which tends to rise when
risk sentiment improves, was last up 0.88% at $0.7223 against
the U.S. dollar.
========================================================
Currency bid prices at 11:09AM (1509 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1889 $1.1800 +0.75% +0.00% +1.1900 +1.1794
Dollar/Yen JPY= 105.5100 105.7000 -0.18% -3.08% +105.8700 +105.3300
Euro/Yen EURJPY= 125.45 124.76 +0.55% +0.00% +125.4800 +124.6400
Dollar/Swiss CHF= 0.9057 0.9132 -0.82% +0.00% +0.9139 +0.9054
Sterling/Dollar GBP= 1.3145 1.3060 +0.65% -0.86% +1.3161 +1.3059
Dollar/Canadian CAD= 1.3245 1.3317 -0.54% +1.99% +1.3330 +1.3233
Australian/Doll AUD= 0.7223 0.7160 +0.88% +2.88% +0.7241 +0.7154
ar
Euro/Swiss EURCHF= 1.0769 1.0777 -0.07% +0.00% +1.0793 +1.0763
Euro/Sterling EURGBP= 0.9043 0.9032 +0.12% +0.00% +0.9050 +0.9013
NZ NZD= 0.6664 0.6622 +0.63% +0.00% +0.6672 +0.6619
Dollar/Dollar
Dollar/Norway NOK= 8.9467 9.0957 -1.64% +1.92% +9.1056 +8.9464
Euro/Norway EURNOK= 10.6407 10.7361 -0.89% +0.00% +10.7467 +10.6339
Dollar/Sweden SEK= 8.6548 8.7179 +0.01% +0.00% +8.7264 +8.6497
Euro/Sweden EURSEK= 10.2927 10.2916 +0.01% +0.00% +10.3035 +10.2836

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Euro near 2-year high https://tmsnrt.rs/33uZUsO
Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
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