* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Saikat Chatterjee
LONDON, Feb 2 (Reuters) - The euro struggled at seven-week
lows against the U.S. dollar on Tuesday as concerns about
extended lockdowns dampened sentiment towards the single
currency.
Data showed retail sales in Germany, Europe's biggest
economy, plunged by more than forecast in December, amplifying
concerns that the euro zone is set for a double-dip recession in
the first quarter of 2021.
"Things are looking even more depressing here," Commerzbank
strategists said in a daily note.
"The German retail sales for December disappointed
massively, presenting a first taste of how the service sector is
suffering under the current European lockdowns, which is likely
to be reflected in the corresponding PMIs (purchasing managers'
indexes) over the course of the week."
Against the dollar, the euro EUR=EBS was trading at
$1.2078, just above an early December low of $1.2056 hit in the
previous session. It has weakened more than 2% from an early
January peak of near $1.2350.
The dollar index =USD eased a touch by 0.1% to 90.87 amid
further gains for global stocks but stayed not far from its
overnight peak of 91.063, its strongest level since Dec. 10.
The dollar also benefited from a massive bout of
short-covering, especially against the yen where hedge funds had
racked up their biggest short bets against the greenback since
October 2016.
Against the yen, the dollar briefly crossed 105 yen for the
first time since mid-November and held firm at 104.875 yen
JPY=EBS .
Many see the dollar's rebound since early last month as a
correction after its relentless decline - the dollar index lost
almost 7% in 2020 - on expectations of a global recovery from
the pandemic amid massive fiscal spending and continued
ultra-easy monetary policy.
Elsewhere, the Australian dollar pared gains after the
country's central bank said it will extend its quantitative
easing programme to buy an additional $100 billion of bonds, a
decision that many market players thought could wait until next
month. The Aussie last stood at $0.7634 AUD=D4 , a touch higher on
the day but off the day's high of $0.7662.
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World FX rates https://tmsnrt.rs/2RBWI5E
USD positions https://tmsnrt.rs/36zTIAb
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