* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, April 20 (Reuters) - The dollar's early gains
fizzled on Monday as investors squared positions before a
European Union summit this week on how to tackle the economic
fallout of the novel coronavirus crisis.
Italian Prime Minister Guiseppe Conte used an interview with
Germany's Sueddeutsche Zeitung on Monday to repeat calls for the
EU to issue common euro zone bonds to demonstrate the bloc's
solidarity in the face of a pandemic likely to trigger the worst
recession in years. EU heads of governments are scheduled to hold a video summit
over how to tackle the economic fallout of the crisis on
Thursday, where differing views on coronabonds, mostly demanded
by southern EU member states, are expected to be voiced.
"The European policy meeting is the big one this week and
markets are in wait and watch mode before the outcome," said
Ilan Solot, a strategist at Brown Brothers Harriman in London.
"Central banks have broadly spent their bullets and now it is up
to the news on the healthcare front."
Against a basket of its rivals =USD , the dollar's early
gains ran out of steam with the greenback dipping into negative
territory after being up as much as 0.3% on the day. It remains
within striking distance of a three-year high of nearly 103 hit
last month.
Investors were waiting for more healthcare news. Data that
infection rates in Europe and the United States from the
coronavirus outbreak have peaked or are approaching a peak would
be expected to prompt traders to step back into currency
markets.
Risk appetite was mostly cautious as data showed Japanese
exports fell by their biggest margin in nearly four years and as
oil prices weakened, reflecting a collapse in global demand.
O/R
The dollar slipped 0.1% versus the euro but was up 0.1% on
the Japanese yen. It last bought 107.71 yen JPY=EBS and traded
at $1.0867 per euro EUR=EBS .
Latest positioning data revealed that investors ramped up
their short positions on the greenback.
The value of the net short dollar position, derived from net
positions of International Monetary Market speculators in the
yen, euro, British pound, Swiss franc and Canadian and
Australian dollars, rose to $12.59 billion in the week ended
April 14, from $10.5 billion the previous week. Elsewhere, the New Zealand dollar NZD=D3 was the only one
to hold its own against the greenback, rising 0.6% to $0.6059
after the nation said it will lower its alert level one notch
next Monday - allowing some businesses to resume - and review
that stance on May 1. New Zealand, which has recorded just 12 deaths from
COVID-19, the respiratory disease caused by the new coronavirus,
remains a rare outlier with other Western and Asian countries
still under lockdown.
The economic impact of the enforced lockdown will be evident
from data later this week where flash PMI data will be released.
Composite euro zone PMIs, comprising services and
manufacturing, plummeted last month to a record low of 29.7
versus February's 51.6 - the biggest monthly drop since the
survey began in July 1998.
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CFTC positions IMAGE https://reut.rs/3cwvA1Z
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