* Dollar continues to fall vs euro, yen, yuan, sterling
* Kiwi lagging G10 currencies, kiwi/aussie dollar reaches 2y
high
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Updates prices, adds new comment)
By Olga Cotaga
LONDON, Aug 18 (Reuters) - The U.S. dollar fell against a
basket of major currencies for a fifth consecutive trading day
on Tuesday, reaching its lowest level in over two years, under
pressure from low yields and bleak economic data in the United
States.
The dollar has enjoyed years of gains but the coronavirus
pandemic has hit the world's largest economy hard, leaving
investors looking for growth opportunities elsewhere.
The dollar index was last down 0.3% at 92.55 =USD , after
falling to 92.46, its lowest since June 2018.
A fresh rally in tech stocks provided a positive backdrop
for markets and subdued demand for the safe-haven dollar, while
a worse than expected reading of the New York Fed's Empire State
business conditions index in August also helped traders stick to
their bearish view on the currency.
Net bearish bets on the greenback rose to their largest
since May 2011 last week, and spot trade in recent days suggests
the position has only grown further since. Real money and leveraged investors preferred to express
their negative view on the dollar via the most-traded currency
pair in the world - euro/dollar - pushing euro longs to a new
record high in the week to Aug. 11, latest CFTC data showed.
"The dollar weakness is not over, so I would not subscribe
to the camp that says it has become a crowded trade," said Neil
Jones, head of hedge fund sales at Mizuho.
"There's a sufficient amount of momentum and a positive
sentiment as well for the euro, so I would suggest that there is
a lot more going on in euro/dollar."
He said all eyes were on the key psychological $1.20 level
for the euro, with further gains in store if the level is
broken.
The dollar was last down 0.2% versus the euro at $1.19
EUR=EBS and had fallen 0.5% against the Japanese yen to 105.40
JPY=EBS , a 1-1/2-week low.
The yield on the 10-year U.S. Treasury bond has drifted back
below 0.70% in recent days after rising from a low of 0.50% hit
earlier this month US10YT=RR .
The greenback also declined 0.5% against the British pound
to $1.3180, its weakest level in nearly two weeks. GBP=D3 .
Even though it has fallen in the past weeks, the dollar
remains 27% above its 2011 levels, suggesting more declines
could be in store for the U.S. currency, especially on a
trade-weighted basis, analysts said.
"There's lots of room, on that basis, for the dollar to
fall, and most of the reason for the euro's recovery, for
example, is simply that the dollar is weaker because of the
Fed's policy shift," said Kit Juckes, macro strategist at
Societe Generale, referring to the Federal Reserve loosening the
interpretation of its inflation mandate.
Among G10 currencies, the kiwi NZD=D3 was the laggard as
New Zealand's largest city remained under lockdown and
anticipation of future monetary easing weighs on the currency.
It last bought $0.6558 and traders said bets on the kiwi
dropping had helped support the Aussie as investors sought
exposure to the Aussie/kiwi cross, which is trading at a
two-year peak.
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