FOREX-Dollar falls against the yen, sterling dips on COVID worries

* Dollar index up 0.04% , dollar declines against the yen
* Kiwi dollar gains after positive economic comments
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices, adds comment)
By Sinéad Carew
NEW YORK, Sept 18 (Reuters) - The U.S. dollar lost ground to
the Japan's yen for the fifth straight day and the yen was at a
seven-week high against the greenback on Friday as investors
sought safety amid concerns about a resurgence in coronavirus
cases in Europe and a lack of progress in U.S. fiscal stimulus
negotiations.
Strategists also cited investor nerves ahead of the Nov. 3
U.S. election and U.S.-China tensions as the dollar index =USD
registered its first weekly decline since August.
Sterling fell after Britain discussed negative rates and
signaled it was considering a second national lockdown as new
COVID-19 cases almost doubled while hospital admissions rose and
infections soared in London and northern England. And France's health ministry on Friday reported the
country's highest number of COVID-19 infections for a single day
since the coronavirus outbreak began. There has been "a wave of risk aversion" due to growing
concerns about the fight with the coronavirus, said Edward Moya,
senior market analyst at OANDA in New York.
"Europe seems to be losing its battle right now," said Moya.
"You're having a lot of downbeat news as far as reopening of the
economy and this is likely to weigh on risk appetite."
While the euro was virtually unchanged against the dollar at
$1.1851 EUR=EBS , it was down for its fourth day out of five
against Japan's currency, last trading at 123.90 yen.
The dollar, after falling to 104.27 yen earlier in the
session - its lowest level against Japan's currency since July
31 - last traded at 104.53, down 0.19% on the day JPY=EBS .
While the dollar =USD was basically flat on the day against a
basket of currencies, it showed a weekly decline after two weeks
of gains.
Along with politics, Japan's policy of yield curve control
was also a factor as it was pushing up real interest rates, said
Boris Schlossberg, managing director of FX strategy at BK Asset
Management.
"Japanese market conditions are much tighter than they
seemingly appear despite QE from the Bank of Japan," said
Schlossberg. "That's creating a distinct and significant tilt
toward the yen."
While U.S. equities have kept close to their record highs,
Schlossberg said dollar weakness may signal more volatility to
come ahead of the Nov. 3 U.S. elections where Republican
President Donald Trump will face off against Democratic
challenger Joe Biden.
"Markets always hate uncertainty. At this point everybody is
convinced that an unambiguous win is not the most likely
scenario," he said.
Schlossberg also pointed to heightening U.S.-China tensions
due to a Trump administration plan to ban WeChat and
video-sharing app TikTok from U.S. app stores starting Sunday
night, blocking Americans from the Chinese-owned platforms over
national security concerns. Tokyo markets will be closed on Monday and Tuesday next
week, so investors positioning for thin liquidity may have
helped the yen.
While the New Zealand dollar NZD=D3 pared gains to trade
up 0.16% at $0.6765, earlier in the day it had hit its highest
in a year and a half after the country's finance minister
sounded positive about the economy in television interviews. The
Reserve Bank of New Zealand meets next week. While strong British consumer spending had helped sterling
earlier, it was last down 0.33% at $1.2929 GBP=D3 .
Currency bid prices at 2:54PM (1854 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1851 $1.1847 +0.03% +5.74% +1.1870 +1.1828
Dollar/Yen JPY= 104.5300 104.7300 -0.19% -3.98% +104.8600 +104.2800
Euro/Yen EURJPY= 123.90 124.09 -0.15% +1.60% +124.3000 +123.4400
Dollar/Swiss CHF= 0.9098 0.9083 +0.17% -5.99% +0.9112 +0.9076
Sterling/Dollar GBP= 1.2929 1.2972 -0.33% -2.47% +1.2999 +1.2917
Dollar/Canadian CAD= 1.3196 1.3164 +0.24% +1.62% +1.3208 +1.3137
Australian/Doll AUD= 0.7298 0.7312 -0.19% +3.96% +0.7333 +0.7284
ar
Euro/Swiss EURCHF= 1.0784 1.0760 +0.22% -0.61% +1.0794 +1.0758
Euro/Sterling EURGBP= 0.9165 0.9130 +0.38% +8.40% +0.9178 +0.9116
NZ NZD= 0.6765 0.6754 +0.16% +0.43% +0.6797 +0.6748
Dollar/Dollar
Dollar/Norway NOK= 9.0852 9.0478 +0.41% +3.49% +9.0994 +9.0170
Euro/Norway EURNOK= 10.7690 10.7210 +0.45% +9.46% +10.7878 +10.6937
Dollar/Sweden SEK= 8.7575 8.7648 -0.13% -6.29% +8.7934 +8.7512
Euro/Sweden EURSEK= 10.3826 10.3963 -0.13% -0.83% +10.4143 +10.3790