REFILE-FOREX-Dollar stalls as economic uncertainties linger

(Corrects analyst's name in paragraph 6)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Eimi Yamamitsu
TOKYO, Aug 19 (Reuters) - The dollar edged slightly higher
on Wednesday after slipping to 27-month low the previous
session, but uncertainties about the U.S. economic recovery and
a new fiscal stimulus package continued to weigh down the
market.
The dollar hit fresh lows against most major currencies
overnight as the Federal Reserve's stimulus programmes weakened
the greenback broadly and lifted U.S. stock indexes to record
highs.
The dollar =USD was up 0.15% in Asian trade at 92.340
against a basket of currencies.
"There is a strong momentum for investors to want to sell
the dollar," said Juntaro Morimoto, an analyst at Sony Financial
Holdings, noting that the greenback has been declining since
last month.
The euro EUR=EBS changed hands at $1.19305, having
strengthened to its highest level since May 2018 in the previous
session.
Sony Financial Holding's Morimoto said the market was
swamped with "stretched long positioning on the euro," which
could weigh down the currency.
"However, dollar selling is the trend for now, so I think
there's enough room for the euro to accelerate its rise."
Sterling GBP=D3 eased modestly from Tuesday's eight-month
high of $1.3241, and was last quoted at $1.3236.
Although the dollar often functions as a safe-haven
investment in times of crisis, it has fallen since the Fed's
intervention into financial markets to maintain liquidity in the
midst of the COVID-19 pandemic.
The Fed's programmes have pushed riskier assets to all-time
highs and reduced demand for safe-havens, even as economic data
has painted a bleak picture of the U.S. recovery.
"While I don't think the dollar will drop steadily, there's
a high possibility of a gradual weakening to continue," said
Minori Uchida, chief currency analyst at MUFG Bank.
Uchida said it was inevitable that U.S. rates would remain
low for a prolonged period of time, mainly due to the pandemic.
"Yield curves in long and medium-term interest rates could
then flatten," he said.
An agreement over a new round of federal stimulus
spending remained elusive, although U.S. House of
Representatives Speaker Nancy Pelosi said on Tuesday that
Democrats in Congress are willing to cut their coronavirus
relief bill in half to get an agreement on new legislation with
the White House and Republicans. Providing additional headwind for the dollar, President
Donald Trump on Tuesday said a big shift to mail-in voting in
the November presidential election could cause so many problems
officials might have to re-do the vote. Separately, the market showed limited reaction to Democrats
formally nominating Joe Biden for president. Biden vowed his
election would repair a pandemic-battered America.
On the data front, Japan's exports fell 19.2% in July from a
year earlier, while the country's core machinery orders fell
7.6% in June from the previous month. Against the yen JPY= , the dollar last traded at 105.55
yen.
Investors are awaiting the release later on Wednesday of the
minutes from the July 28-29 FOMC meeting, with speculation the
Fed will adopt an average inflation target, which would seek to
push inflation above 2% for some time.
Elsewhere in currency markets, the yuan CNH=D3 firmed
0.12% higher to 6.9165 per dollar, after hitting a five-month
high on Tuesday at 6.9246.
The risk-sensitive Australian dollar AUD=D3 traded 0.14%
lower at $0.72335, while the kiwi NZD=D3 was little changed at
$0.6601.