FOREX-Dollar rally loses steam as investors eye stimulus talks in Washington

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

(Updates prices, comments, changes byline, dateline, previous
LONDON)
By Caroline Valetkevitch
NEW YORK, Aug 4 (Reuters) - The U.S. dollar was little
changed against a basket of currencies on Tuesday, as recent
gains driven by dollar bears taking profits ran out of steam and
investors looked to Washington for direction as talks on the
next round of coronavirus relief aid continued.
After its worst month in a decade in July, the greenback
started August on a firm note as some investors trimmed their
short positions.
But the immediate outlook for the dollar remains tied partly
to relief aid talks in Washington and the economic impact of new
virus cases in the United States.
The White House and Democratic congressional leaders have
reported some progress in recent days in discussions over a
fifth major coronavirus aid bill to help the economy, but they
remain apart on a range of issues. Expectations that the U.S. economy's recovery would lag its
peers have weighed on the dollar.
"While a consolidation or a modest corrective rebound was
inevitable after the sharp fall last month, market sentiment
towards the dollar remains negative due to dominating concerns
about the scale of the coronavirus pandemic in the U.S. and its
devastating impact on the economy," Piotr Matys, senior emerging
markets FX Strategist at Rabobank, said in a note.
There are still a lot of questions over the U.S. economy's
recovery, and the next big data points will be weekly jobless
claims and the July U.S. employment report this week, said Boris
Schlossberg, managing director of FX strategy at BK Asset
Management in New York.
But giving some support to the dollar for now is "a little
bit of profit-taking. The dollar is so grossly oversold. ... You
had this enormous amount of one-way price action," he said.
The dollar index, which measures the currency against a
basket of currencies, was about flat at 93.539. =USD
The euro - which gained 5% at the dollar's expense in July -
was last down 0.04% at $1.1756. EUR=EBS
The Aussie dollar AUD=D3 was up 0.31% after the Australian
central bank held policy steady, as expected.
Australia's central bank predicted that the economic
recovery would be uneven. The country's second biggest state,
Victoria, is under lockdown to fight a resurgence of the virus.
Despite a slowdown in new U.S. virus cases and encouraging
factory data, investors are reserving judgement on whether a
U.S. economy with 30 million people out of work can really lead
the world's recovery.
Top White House officials and Democratic leaders in the U.S.
Congress were due to try again on Tuesday to narrow gaping
differences over a fifth major coronavirus-aid bill to help the
economy. Days of closed-door negotiations have so far yielded
few results, participants say. ========================================================
Currency bid prices at 10:55AM (1455 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1756 $1.1761 -0.04% +4.87% +1.1806 +1.1722
Dollar/Yen JPY= 105.8300 105.9400 -0.10% -2.77% +106.1900 +105.7400
Euro/Yen EURJPY= 124.44 124.61 -0.14% +2.03% +125.0100 +124.2700
Dollar/Swiss CHF= 0.9159 0.9177 -0.20% -5.36% +0.9191 +0.9143
Sterling/Dollar GBP= 1.3046 1.3072 -0.20% -1.61% +1.3107 +1.2982
Dollar/Canadian CAD= 1.3368 1.3389 -0.16% +2.93% +1.3420 +1.3360
Australian/Doll AUD= 0.7145 0.7123 +0.31% +1.75% +0.7153 +0.7106
ar
Euro/Swiss EURCHF= 1.0769 1.0793 -0.22% -0.76% +1.0810 +1.0740
Euro/Sterling EURGBP= 0.9009 0.8994 +0.17% +6.56% +0.9040 +0.8991
NZ NZD= 0.6608 0.6610 -0.03% -1.90% +0.6624 +0.6590
Dollar/Dollar
Dollar/Norway NOK= 9.1180 9.1306 -0.14% +3.85% +9.1671 +9.0887
Euro/Norway EURNOK= 10.7206 10.7410 -0.19% +8.97% +10.7700 +10.7128
Dollar/Sweden SEK= 8.7507 8.7394 +0.01% -6.38% +8.7850 +8.7184
Euro/Sweden EURSEK= 10.2880 10.2867 +0.01% -1.72% +10.3044 +10.2744