FOREX-Dollar falls, riskier currencies gain, ahead of Republican convention

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices, adds commentary)
By Elizabeth Howcroft
LONDON, Aug 24 (Reuters) - The dollar fell on Monday while
European shares and riskier currencies gained, with some
analysts attributing the pick up in sentiment to U.S. regulators
approving a treatment for COVID-19 patients ahead of the
Republican National Convention.
More than 800,000 people around the world have died from the
coronavirus, with the death toll in the United States alone
surpassing 170,000. On Sunday the country granted "emergency use
authorization" for treatment using the blood plasma of patients
who have recovered from the disease. Asian shares strengthened overnight and European indexes
opened higher. Riskier currencies such as the Norwegian crown
NOK=D3 , British pound GBP=D3 and Aussie AUD=D3 and Kiwi
dollars NZD=D3 rose versus the U.S. dollar.
The dollar was little changed overnight but fell as markets
opened in Europe, down around 0.2% at 92.972 by 1053 GMT =USD .
It has lost 0.5% against the basket of currencies so far this
month, consolidating losses after falling 4% the month before.
Derek Halpenny, MUFG's head of research, said that the
announcement about blood plasma treatment was likely to have
only a short-term impact on sentiment.
"I think investors generally will be relatively sceptical of
the news especially coming from Trump between now and the
election," he said.
"There's obviously a very significant incentive for him to
speed up the approvals or big up the emergence of some good
news."
"I think the markets are still relatively positioned for a
vaccine being done and dusted by year-end and gradually rolled
out in the first half of 2021," he added. "I think it would take
a lot for the markets to price in something more rapid than
that."
In a data-light day, market participants are awaiting the
start of the four-day Republican National Convention, at which
U.S. President Donald Trump will seek to reboot his struggling
election campaign. The euro was up around 0.3% versus the dollar, at $1.183
EUR=EBS .
Last week, the dollar outperformed the euro for the first
time since mid-June, as U.S. business activity improved while
European business surveys showed the economic recovery
faltering. The euro had previously rallied as the continent controlled
the spread of the coronavirus better than in the U.S., and
European Union leaders agreed on an EU-wide recovery fund.
France posted a record high in daily post-lockdown
infections on Sunday. The health minister on Saturday ruled out
a total lockdown but said localised measures could be taken.
Italy also said it was not considering a new lockdown
despite a rising number of infections. "I do think the re-emergence of COVID is going to have a
clearer impact on the incoming economic data and certainly the
euro gain has been a picture of a more favourable outlook in
Europe - not just on COVID but on the policy response and the
euro recovery fund etc - but generally that relatively macro
story is less compelling," MUFG's Halpenny said.
The Australian dollar was up 0.5% versus the greenback at
0.719 AUD=D3 , little affected by the country's treasury saying
that effective unemployment will climb above 13%. New Zealand Prime Minister Jacinda Ardern on Monday extended
a coronavirus lockdown in Auckland, the country's largest city,
until the end of the week and introduced mandatory mask wearing
on public transport across the nation. The Kiwi dollar did not strengthen as much as other risk
currencies, up 0.2% at 0.6554 NZD=D3 .
ING strategists said the market is also grappling with
geopolitical concerns, with the protests in Belarus posing the
risk of direct intervention by Russia. Elsewhere, China's foreign ministry said it would file a
lawsuit against the Trump administration over its ban on
Bytedance, the Chinese owners of messaging app WeChat and
video-sharing app TikTok.