FOREX-Euro highest since 2018, dollar hurt by coronavirus spread

(Adds dollar short positioning, sterling; updates prices)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Karen Brettell
NEW YORK, July 27 (Reuters) - The dollar tumbled to an
almost two-year low against the euro on Monday on concerns about
the growing number of coronavirus cases in the United States and
ahead of the Federal Reserve's meeting this week when it is
expected to confirm its commitment to rock-bottom interest
rates.
“It seems like we're seeing the dollar lose its crown,” said
Edward Moya, senior market analyst at OANDA in New York. “There
are high expectations you're going to see the Fed continue to
signal that they're prepared to do more at a longer run, and the
U.S. economic recovery is not going to be anywhere near as
smooth as what is unfolding in Europe.”
Florida on Sunday became the state with the second highest
number of total coronavirus cases, just behind California and
becoming the second state to overtake New York, which was the
worst-hit state at the start of the U.S. novel coronavirus
outbreak, according to a Reuters tally. U.S. Treasury Secretary Steve Mnuchin said on Sunday that
Republican coronavirus relief legislation will be made public on
Monday and he believes the party can move quickly with Democrats
to hammer out their differences. The Fed is expected to reiterate that it will keep rates
near zero for years to come when it concludes its two-day policy
meeting on Wednesday. Investors will be watching to see if the
U.S. central bank indicates that it will increase its purchases
of longer-dated debt and whether yield caps are likely going
forward.
The euro EUR= was last up 0.79% at $1.1726, after earlier
reaching $1.1781, the highest level since September 2018.
The single currency may extend gains to $1.20 if the region
is able to contain any resurgences of the coronavirus, Moya
said.
“I think you're going to see a steady amount of investment
and market positioning going back to Europe, and that will
provide some room for much more weakness here with the U.S.
dollar,” he said.
The dollar index =USD fell 0.72% to 93.68. It earlier
dipped to 93.47, the lowest since June 2018.
A broad measure of dollar positioning on Friday showed that
net short positions in the greenback last week rose to the
highest level since April 2018. The safe-haven Japanese yen gained on the concerns about
deteriorating U.S.-China relations. Tensions rose after
Washington last week ordered China's consulate in Houston to
close, prompting Beijing to shutter the U.S. consulate in
Chengdu.
The dollar fell 0.66% JPY= to 105.42 yen, after earlier
dropping to 105.13, the weakest since March 13.
Sterling gained to a more than four-month high on Monday,
driven by dollar weakness and as uncertainty over Brexit and
Britain's economic prospects kept most investors on the
sidelines. Currency bid prices at 3:31PM (1931 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1746 $1.1654 +0.79% +4.79% +1.1781 +1.1639
Dollar/Yen JPY= 105.4200 106.1200 -0.66% -3.16% +106.1800 +105.1300
Euro/Yen EURJPY= 123.85 123.70 +0.12% +1.56% +123.9000 +123.2200
Dollar/Swiss CHF= 0.9204 0.9206 -0.02% -4.90% +0.9229 +0.9168
Sterling/Dollar GBP= 1.2876 1.2789 +0.68% -2.89% +1.2901 +1.2783
Dollar/Canadian CAD= 1.3361 1.3413 -0.39% +2.89% +1.3430 +1.3354
Australian/Doll AUD= 0.7144 0.7103 +0.58% +1.75% +0.7149 +0.7088
ar
Euro/Swiss EURCHF= 1.0815 1.0726 +0.83% -0.34% +1.0837 +1.0729
Euro/Sterling EURGBP= 0.9124 0.9110 +0.15% +7.93% +0.9148 +0.9099
NZ NZD= 0.6679 0.6644 +0.53% -0.85% +0.6692 +0.6628
Dollar/Dollar
Dollar/Norway NOK= 9.0986 9.1588 -0.66% +3.65% +9.1865 +9.0624
Euro/Norway EURNOK= 10.6912 10.6760 +0.14% +8.67% +10.7198 +10.6325
Dollar/Sweden SEK= 8.7407 8.8181 -0.31% -6.49% +8.8499 +8.7189
Euro/Sweden EURSEK= 10.2712 10.3033 -0.31% -1.89% +10.3033 +10.2578