FOREX-Dollar falls, euro hovers at 4-month high as EU negotiates rescue fund

* Euro rises against dollar, just under technically
significant
$1.15 level
* Dollar weaker against yen, Swiss franc
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout)
By Kate Duguid
NEW YORK, July 17 (Reuters) - The dollar was broadly lower
on Friday as the euro rose to just under a four-month high, with
negotiations underway between European Union leaders on a
recovery fund that could lift the bloc out of the current
recession.
EU leaders' views on a mass stimulus plan remained
"diametrically different", Czech Prime Minister Andrej Babis
said on Friday. The 27 EU heads are struggling to reach
consensus on the 2021-27 budget, proposed at above 1 trillion
euros, and a linked new recovery fund worth 750 billion euros,
meant to help rebuild southern economies most affected by the
pandemic.
The euro EUR= was up 0.49% at $1.144 late in the North
American session, just off Wednesday's top of $1.145, its
highest since the coronavirus financial crash in March.
"A positive outcome by the end of the EU summit Saturday
could potentially be the euro's ticket to fresh highs for the
year," said Joe Manimbo, senior market analyst at Western Union
Business Solutions.
If progress is made, the euro could break through the
technically significant $1.15 level, which has not been touched
since February 2019.
"Conversely, a disappointing outcome that merely kicks the
fiscal can down the road would risk an unwinding of recent euro
gains," Manimbo said.
Implications for the euro should the EU go ahead with its
plan would be long-lasting, Marshall Gittler, head of investment
research at BDSwiss, told his clients.
A deal "would make the euro more attractive as a reserve
currency" by "establishing a central fiscal capacity that can
respond to adverse shocks, which would make monetary union more
stable", he said.
The dollar index =USD , which heavily weights the euro, was
0.36% lower at 95.930. The dollar was also weaker against the
yen JPY= and the Swiss franc CHF= , as a risk-on move
diminished appetite for safe-haven assets and bolstered U.S.
equities.
The greenback's fall against rival safe-havens may suggest
its appeal, even in times of crisis, has been waning given the
resurgence of coronavirus infections in the United States.
That resurgence eroded consumer sentiment in mid-July, the
University of Michigan consumer sentiment index showed on
Friday, threatening the nascent housing and economic recovery.
Some areas in virus hot spots in the populous South and West
regions have either shut down businesses again or paused
reopenings.