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FOREX-Dollar rises but posts biggest monthly drop in a decade

Published 08/01/2020, 03:48 AM
Updated 08/01/2020, 03:50 AM
© Reuters.
DX
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* Dollar index up slightly after recent weakness
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds quotes, latest prices)
By Caroline Valetkevitch
NEW YORK, July 31 (Reuters) - The dollar rose against a
basket of currencies on Friday as investors covered shorts and
took profits after the biggest monthly decline in the currency
in a decade.
The dollar index =USD was down 4.1% for July, its biggest
monthly percentage fall since September 2010, with most of the
drop coming in the last 10 days as new coronavirus cases surged
across several U.S. states and some recent data pointed to an
economic recovery losing steam. On Friday, the dollar mostly held gains after data showed
U.S. inflation-adjusted consumer spending has pulled out of
April's deep hole but remains below its pre-pandemic level, and
the currency strengthened as the session wore on.
After sliding as low as 92.539 earlier, the lowest since May
2018, the dollar index was last up 0.6% at 93.377.
"You had the dollar enter into a very serious decline over
the month," said Boris Schlossberg, managing director of FX
strategy at BK Asset Management in New York. "Interest rates are
going down, and that makes the dollar much less attractive as a
yield play, but (also) the market is starting to become aware of
the political risk of the dollar."
"Today, we're just seeing a little bit of short covering,
and a little bit of risk off always creates flows into the
dollar."
On Thursday, confidence in the dollar was undermined after
U.S. President Donald Trump raised the possibility of delaying
the Nov. 3 presidential election. euro was at $1.1786 EUR=EBS , down 0.51% on the day.
The currency was little moved by data showing the euro zone
economy recorded its deepest contraction on record in the second
quarter while the bloc's inflation unexpectedly ticked up in
July. The euro traded below $1.10 as recently as May, but after
European Union leaders agreed this month to a 750 billion euro
economic recovery fund - while also taking on debt jointly in a
major boost to regional cooperation - many investors have warmed
to the currency again.
On a trade-weighted basis, the euro is at its highest since
2014 EUREER=ECBF .
The dollar's drop this month has created space for a rebound
in currencies hit hard in March, when investors rushed for the
safety of the greenback as panic over the coronavirus gripped
markets.
Against the Japanese yen, the dollar earlier hit a
4-1/2-month low but last stood at 105.77 JPY=EBS , up 1%.
The British pound was at $1.3097 GBP=D3 , up 0.03% on the
day.
========================================================
Currency bid prices at 3:30PM (1930 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1786 $1.1846 -0.51% +5.14% +1.1908 +1.1762
Dollar/Yen JPY= 105.7700 104.7200 +1.00% -2.84% +106.0500 +104.1900
Euro/Yen EURJPY= 124.69 124.06 +0.51% +2.25% +125.2000 +123.8500
Dollar/Swiss CHF= 0.9142 0.9087 +0.61% -5.54% +0.9144 +0.9057
Sterling/Dollar GBP= 1.3097 1.3093 +0.03% -1.22% +1.3169 +1.3081
Dollar/Canadian CAD= 1.3385 1.3422 -0.28% +3.06% +1.3439 +1.3371
Australian/Doll AUD= 0.7142 0.7193 -0.71% +1.71% +0.7227 +0.7134
ar
Euro/Swiss EURCHF= 1.0776 1.0768 +0.07% -0.72% +1.0798 +1.0747
Euro/Sterling EURGBP= 0.8998 0.9045 -0.52% +6.43% +0.9063 +0.8981
NZ NZD= 0.6629 0.6698 -1.03% -1.59% +0.6715 +0.6624
Dollar/Dollar
Dollar/Norway NOK= 9.0927 9.0746 +0.20% +3.58% +9.1289 +9.0278
Euro/Norway EURNOK= 10.7170 10.7520 -0.33% +8.94% +10.7825 +10.7103
Dollar/Sweden SEK= 8.7723 8.6902 +0.40% -6.15% +8.7957 +8.6431
Euro/Sweden EURSEK= 10.3415 10.2998 +0.40% -1.22% +10.3505 +10.2740


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U.S. dollar index https://tmsnrt.rs/2CVqUXv
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