FOREX-Dollar nurses losses as selling pressure builds on several fronts

* Dollar perched near milestone lows
* Kiwi lags broad rally as easing expectations grow
* AUD/NZD crosses 1.10 for the first time in two years
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Aug 18 (Reuters) - The dollar teetered near
milestone lows on Tuesday, after a triple blow of retreating
yields, soft U.S. economic data and a dip in safe-haven demand
exerted broad selling pressure.
Against the euro, Aussie, pound, Swiss franc and yuan it is
poised to re-test multi month or multi year troughs made earlier
in the month, though moves in morning trade were small as
Wednesday's release of the Federal Reserve minutes looms on the
horizon.
The euro EUR=EBS last sat at $1.1874, just below a recent
two-year high of $1.1916. The Aussie AUD=D3 was steady at
$0.7213 and close to an 18-month top of 0.$7242 hit on Aug. 7.
Investors have been relieved by a delay in the review of the
U.S.-China trade deal this week, which has left the agreement
standing and reinforced a belief that the trade relationship can
hold even amidst conflict on multiple other fronts.
A fresh rally in tech stocks added to the positive mood, and
together with a pullback in U.S. yields and a weak reading in a
U.S. manufacturing survey has many traders sticking to their
bearish convictions on the dollar.
Net bearish bets on the U.S. dollar grew to their largest
since May 2011 last week and spot trade in recent days suggest
the position has only grown further since. "Extended short dollar positions risk a sharp pull back if
the dollar downside stalls further, but for now the negatives
for the dollar are mostly still in place," said analysts at
Singapore's OCBC Bank.
"We are reduced to staying in the game while the music is
playing."
OCBC called out soft data, the political impasse holding up
U.S. fiscal stimulus and a "limited appetite for interpreting
Sino-U.S. relations as being in an outright downward spiral," as
backing the dollar's gloomy outlook.
Underscoring that view, the yuan CNH=D3 sat at 6.9306 per
dollar, within range of a five-month high of 6.9280, despite the
Trump administration flagging a further tightening of
restrictions against Chinese tech gear maker Huawei. CNY/
On the data front the New York Fed's Empire State business
conditions index tumbled to 3.7 in August from 17.2 in July -
far lower than the 15 points forecast by a Reuters survey.
Delinquency rates for residential mortgages also posted the
largest quarterly increase on record. "A high delinquency rate for an extended period can impair
the banking system," said Commonwealth Bank of Australia
currency analyst Joe Capurso.
"An impaired banking system could hold back the U.S.
economic recovery like it did in the aftermath of the (2008
crisis)," he said.
The Japanese yen JPY= rose back past 106-per-dollar to
105.88 after a 2.6 basis point drop in benchmark U.S. 10-year
government bond yields overnight. US/
Investors expect the release of U.S. Federal Reserve minutes
on Wednesday to possibly determine the next moves.
The British pound GBP=D3 was stalled around $1.1311 as
investors are watching the latest round of Brexit negotiations,
with the future of London's financial institutions' access to
the European market in focus. Against a basket of currencies =USD the dollar sat at an
eight-session low of 92.762.
Among G10 currencies, the kiwi was the laggard as New
Zealand's largest city remains under lockdown and anticipation
of future monetary easing weighs on the currency.
It last bought $0.6557 and traders said bets on the kiwi
dropping had supported the Aussie as investors sought exposure
to the Aussie/kiwi cross, which is trading at a two-year peak.
"The move has been one way traffic," said Chris Weston, head
of research at Melbourne broker Pepperstone, who is holding for
the ride even though the pair AUDNZD= has hit his price target
of NZ$1.10 per Aussie.