* Fed's Bullard cools bets on U.S. 50 bps rate cut in July
* Euro hits new 3-month high, yens climbs to highest since Jan
* Further dollar softness seen hinging on G20 summit outcome
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, adds quote)
By Richard Leong
NEW YORK, June 25 (Reuters) - The dollar fell against most major currencies on
Tuesday, hitting a three-month low against the euro, as expectations of multiple decreases
of U.S. interest rates by the Federal Reserve have spurred selling of the U.S. currency.
Growing tensions between Iran and the United States stoked fresh safe-haven buying of
the yen, which reached its strongest levels against the greenback since early January.
Last week's signal from the U.S. central bank that it was ready to lower borrowing
costs to counter slowing domestic growth and sluggish inflation caused traders to exit
their earlier bullish positions on the dollar, analysts said. Falling U.S. bond yields and bearish technical indicators have stoked the view the
greenback would have more room to fall in the coming months, analysts said.
"This has more legs to go," said Paresh Upadhyaya, director of currency strategy at
Amundi Pioneer Investments in Boston.
The dollar found respite from comments from St. Louis Fed President James Bullard to
Bloomberg Television, who had argued for a rate-cut last week, that an aggressive 50
basis-point rate cut at next month's meeting "would be overdone." At a public event in New York, Fed Chairman Jerome Powell said the central bank was
wrestling with whether to cut rates due to possible drag on the economy from escalating
trade tensions. "Powell wants to wait and see because he admits changes have been very rapid," said
Juan Perez, senior currency trader at Tempus, Inc in Washington.
Interest rate futures implied traders fully priced in a quarter-point rate cut from
the Fed next month and saw a high rising probability of at least two more cuts after July.
In late U.S. trading, the dollar JPY=EBS was down 0.14% at 107.145 yen after hitting
106.78 yen during Asian trading, which was its weakest since Jan. 3.
Demand for the yen was underpinned by new U.S. sanctions against Iran's supreme leader
and foreign minister. Iran said on Tuesday the move had closed off diplomacy between the
two countries. The greenback was 0.32% lower versus the pound GBP=D3 . It was modestly weaker
against the Canadian and New Zealand dollars. CAD=D4 NZD=D4
On the other hand, the euro was down 0.22% at $1.1373. The single currency retreated
from $1.1412 earlier Tuesday, which was its highest since March 21.
The dollar index .DXY moved closer toward its 200-day moving average at 96.131 based
primarily on a subsequent weakening of the euro.
Investors are monitoring whether U.S. President Donald Trump and Chinese President Xi
Jinping will at least call a truce in their trade war when they meet at a summit of the
G20 major economies in Osaka, Japan, later this week.
Trump considers his meeting with Xi an opportunity to "maintain his engagement" and
see where China is on the trade dispute, a senior U.S. official said on Monday.
Currency bid prices at 1528 EDT (1928 GMT):
Description RIC Last U.S. Close Pct YTD Pct High Bid Low Bid
Previous Change Change
Session
Euro/Dollar EUR= $1.1371 $1.1396 -0.22% -0.85% +1.1412 +1.1345
Dollar/Yen JPY= 107.1300 107.2800 -0.14% -2.84% +107.4000 +106.7900
Euro/Yen EURJPY= 121.84 122.28 -0.36% -3.47% +122.4600 +121.6600
Dollar/Swiss CHF= 0.9747 0.9718 +0.30% -0.68% +0.9776 +0.9695
Sterling/Dollar GBP= 1.2697 1.2739 -0.33% -0.47% +1.2783 +1.2673
Dollar/Canadian CAD= 1.3177 1.3177 +0.00% -3.37% +1.3208 +1.3152
Australian/Doll AUD= 0.6960 0.6961 -0.01% -1.26% +0.6978 +0.6943
ar
Euro/Swiss EURCHF= 1.1086 1.1076 +0.09% -1.49% +1.1124 +1.1062
Euro/Sterling EURGBP= 0.8954 0.8944 +0.11% -0.33% +0.8963 +0.8917
NZ NZD= 0.6645 0.6617 +0.42% -1.07% +0.6661 +0.6618
Dollar/Dollar
Dollar/Norway NOK= 8.5391 8.4789 +0.71% -1.15% +8.5575 +8.4769
Euro/Norway EURNOK= 9.7095 9.6678 +0.43% -1.98% +9.7140 +9.6644
Dollar/Sweden SEK= 9.2729 9.2778 -0.28% +3.45% +9.2954 +9.2421
Euro/Sweden EURSEK= 10.5460 10.5760 -0.28% +2.75% +10.5906 +10.5180
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GRAPHIC-Trade tensions boost U.S. rate-cut expectations https://tmsnrt.rs/2KdE2by
GRAHIC-Trade tensions boost U.S. rate-cut expectations interactive https://tmsnrt.rs/2KdDNxa
GRAPHIC-Dollar vs euro, Japanese yen https://tmsnrt.rs/2Ft9GPi
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