* Pound tumbles as no-deal Brexit talk grows louder
* Euro falls ahead of Thursday's ECB meeting
* Risk aversion hits FX markets, dollar shines
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 8 (Reuters) - The safe-haven dollar climbed to a four-week peak on Tuesday, led by
gains versus sterling on renewed worries about Brexit and as risk appetite waned with a sell-off on Wall
Street.
Analysts said the U.S. currency's gains are likely to be unsustainable.
Sterling fell to a four-week low against the dollar and was last down more 1.2% at $1.2987 GBP=D3 .
Britain had gone into Tuesday's fresh round of Brexit trade talks warning it was ramping up no-deal
preparations. A sense of crisis took hold as the Financial Times reported the head of Britain's legal
department had quit over suggestions Boris Johnson wanted to override parts of the existing divorce deal.
GBP/
"Renewed uncertainty around the seemingly never-ending Brexit process has sent sterling tumbling this
week, and probably weighed a bit on European currencies more generally, given that a disorderly end to the
UK's transition period would be disruptive for the rest of Europe too," said Jonas Goltermann, senior
economist at Capital Economics.
Aside from Brexit concerns, currency investors flocked to the dollar as U.S. stocks got hammered .N
"There is also some risk-off moves in the stock market, which is a mild positive for the dollar," said
Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto.
In afternoon trading, the dollar index rose 0.4% to 93.445 =USD , after advancing to a four-week high
of 93.483.
Capital Economics' Goltermann said the dollar's gains may be temporary, as he expects the global
economy to continue to recover from the coronavirus shock. That should help stocks and riskier currencies
gain further traction, he added.
The dollar struggled against the Japanese yen, falling 0.3% to 106.04 JPY=EBS , weighed down by the
meltdown in U.S. stocks.
The yen rose despite data showing Japan's economy shrank an annualized 28.1% in April-June, worse than
the initial estimate of a 27.8% contraction, revised data from the Cabinet Office showed on Tuesday.
The euro fell to a two-week low versus the dollar, and was last down 0.3% at $1.1779 EUR=EBS ahead
of the European Central Bank's post-summer meeting later in the week.
Most analysts expect no change in the central bank's policy but are looking to its message on
inflation. Markets also want to know if the bank is concerned about the euro's strength following its
recent rise to $1.20.
Euro zone data showed its economy shriveled slightly less than initially estimated in the second
quarter, but the drop was still the sharpest ever as consumer spending slumped due to COVID-19
restrictions. That had a minor impact on the euro though.
The Chinese yuan dipped against the dollar in the offshore market, after U.S. President Donald Trump
warned about "decoupling" the U.S. and Chinese economies. The dollar was last up
0.2% at 6.848 yuan.
In emerging markets, Turkey's lira hit another record low and Russia's rouble sagged to its lowest
since April amid ongoing talk about fresh Western sanctions. EMRG/FRX
========================================================
Currency bid prices at 3:01PM (1901 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1777 $1.1817 -0.34% +5.06% +1.1827 +1.1766
Dollar/Yen JPY= 106.0200 106.2500 -0.22% -2.61% +106.3800 +105.8700
Euro/Yen EURJPY= 124.88 125.53 -0.52% +2.40% +125.6400 +124.7100
Dollar/Swiss CHF= 0.9174 0.9159 +0.16% -5.21% +0.9199 +0.9157
Sterling/Dollar GBP= 1.2988 1.3166 -1.35% -2.04% +1.3171 +1.2987
Dollar/Canadian CAD= 1.3224 1.3096 +0.98% +1.83% +1.3226 +1.3086
Australian/Doll AUD= 0.7215 0.7274 -0.81% +2.76% +0.7309 +0.7214
ar
Euro/Swiss EURCHF= 1.0806 1.0822 -0.15% -0.42% +1.0846 +1.0798
Euro/Sterling EURGBP= 0.9067 0.8974 +1.04% +7.25% +0.9071 +0.8970
NZ NZD= 0.6613 0.6690 -1.15% -1.83% +0.6706 +0.6613
Dollar/Dollar
Dollar/Norway NOK= 9.1185 8.9329 +2.08% +3.87% +9.1251 +8.9224
Euro/Norway EURNOK= 10.7435 10.5603 +1.73% +9.21% +10.7520 +10.5510
Dollar/Sweden SEK= 8.8232 8.7691 +0.26% -5.61% +8.8320 +8.7655
Euro/Sweden EURSEK= 10.3935 10.3665 +0.26% -0.72% +10.4005 +10.3566
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Sterling volatility https://tmsnrt.rs/2R3Ue1t
Rouble rattled by sanctions talk https://tmsnrt.rs/3368Z9n
Currencies in 2020 https://tmsnrt.rs/2FgYrvM
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