FOREX-Dollar slides as U.S. stimulus impasse weighs

* U.S. CPI higher than expected, briefly lifts dollar
* Markets focus on stimulus package
* Dollar hits 3-week high vs yen
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds new comment, U.S. data, FX table, updates prices, changes byline, previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 12 (Reuters) - The dollar fell from a one-week high on Wednesday, as political wrangling
over a stimulus package for the U.S. economy halted its recent rebound.
The greenback, however, rose to a three-week peak against the yen, climbing for a fourth straight
session. The dollar/yen pair typically moves in tandem with U.S. Treasury yields, with the 10-year
advancing to a one-month high.
Stronger-than-expected U.S. CPI numbers, meanwhile, briefly lifted the dollar against a basket of
currencies.
Data showed the U.S. consumer price index rose 0.6% last month after rebounding 0.6% in June.
Excluding the volatile food and energy components, the CPI jumped 0.6% last month. That was the largest
gain since January 1991 and followed a 0.2% rise in June. But the market's focus was on the U.S. stimulus package. Investors are watching for signs a political
impasse in Washington over a further rescue package for the pandemic-hit economy can be overcome.
U.S. Treasury Secretary Steven Mnuchin said on Wednesday that the White House and top Democrats in
Congress may not be able to reach a deal on coronavirus aid, in the fifth day without talks on the
stalemate blocking relief to tens of millions of Americans. nL1N2FE0ND
"Over the longer-term, the fact that there is no stimulus package is a good thing for the dollar. If
we're going to print another $3.5 trillion, that's bad for the dollar," said Ronald Simpson, managing
director, global currency analysis at Action Economics in Florida.
But he added that the fact there's a stalemate in negotiations is a negative for the dollar in the
short-term.
In mid-morning trading, the dollar index, which has held above a two-year low hit last Thursday, was
down 0.3% against a basket of currencies at 93.390 =USD , after shedding gains made in Asian trading.
"If there is no movement in the negotiations soon, the Fed's concerns are quite likely to have an
impact on the dollar sooner or later," FX analysts at Commerzbank said in a note.
Against the yen, the dollar rose 0.3% to 106.77 yen JPY=EBS .
Improved U.S. debt yields have pressured the yen by luring investment from zero-yielding Japan.
The euro was up 0.5% at $1.1793 EUR=EBS .
Sterling GBP=D3 was broadly flat, despite data showing the British economy had entered a deep
recession, as signs of a recovery in June provided some support for the currency.
The New Zealand dollar NZD=D3 was flat at US$0.6576, after the country's central bank held rates but
surprised markets by extending its bond-buying programme and putting slightly more emphasis on the
possibility of negative rates. Currency bid prices at 9:53AM (1353 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1790 $1.1739 +0.43% +5.17% +1.1799 +1.1712
Dollar/Yen JPY= 106.7200 106.4800 +0.23% -1.97% +107.0100 +106.4500
Euro/Yen EURJPY= 125.84 125.00 +0.67% +3.19% +126.0500 +124.9600
Dollar/Swiss CHF= 0.9113 0.9167 -0.59% -5.84% +0.9198 +0.9110
Sterling/Dollar GBP= 1.3040 1.3048 -0.06% -1.65% +1.3067 +1.3006
Dollar/Canadian CAD= 1.3267 1.3300 -0.25% +2.16% +1.3346 +1.3258
Australian/Doll AUD= 0.7154 0.7142 +0.17% +1.89% +0.7164 +0.7110
ar
Euro/Swiss EURCHF= 1.0746 1.0762 -0.15% -0.98% +1.0786 +1.0746
Euro/Sterling EURGBP= 0.9040 0.8996 +0.49% +6.93% +0.9049 +0.8989
NZ NZD= 0.6573 0.6576 -0.05% -2.42% +0.6582 +0.6528
Dollar/Dollar
Dollar/Norway NOK= 8.9401 9.0138 -0.82% +1.84% +9.0499 +8.9310
Euro/Norway EURNOK= 10.5430 10.5760 -0.31% +7.17% +10.6038 +10.5378
Dollar/Sweden SEK= 8.6974 8.7505 -0.34% -6.95% +8.7903 +8.6859
Euro/Sweden EURSEK= 10.2565 10.2913 -0.34% -2.03% +10.2995 +10.2440