* EU deal cheered, although largely priced in
* Analysts say dollar set to struggle for now
* Commodity currencies soar as risk sentiment improves
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Recasts, adds new comment, FX table, updates prices, changes
byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 21 (Reuters) - The euro on Tuesday climbed to
its highest against the U.S. dollar in more than four months
after European Union countries struck an agreement on a massive
stimulus plan to revive their coronavirus-battered economies.
An upturn in sentiment following the EU deal lifted the
Australian dollar to a 15-month high, the New Zealand currency
to a six-month peak and the Canadian dollar to its strongest
level in six weeks. These are commodity currencies that thrive
when risk appetite rises.
The EU deal - a compromise on concerns that thrifty northern
states had about handouts for more their more profligate
neighbors - was hailed as an important signal of unity by
Europe's leaders and a foundation for economic recovery.
"There was all this anticipation for this rescue package,
which was almost guaranteed that it will pass and when it did,
it made everybody happy," said Juan Perez, currency trader at
Tempus Inc in Washington.
"And this kind of symbolizes the fact that the European
Union is going to work together to achieve fiscal integration
for this rescue package. And it came to fruition," he added.
Encouraging results from several COVID-19 vaccine trials
also boosted market sentiment and drove a rally in global stock
markets. In mid-morning trading, the euro rose 0.1% to $1.1457
EUR=EBS , after earlier hitting $1.1470, the highest since
early March. Gains were tempered as investors had already priced
in an EU agreement.
Analysts said there was little new information in the final
deal to spur the euro much higher immediately, with the
breakdown between grants and loans already known.
"From now on, it is primarily the recovery of the real
economy and the development of (coronavirus) infections that
will determine how the euro will perform going forward," said
Commerzbank analyst Esther Reichelt said.
The dollar was down 0.1% against a basket of other
currencies at 95.592 =USD .
ING analysts said they are looking for "more gains to $1.20
later this year" as dollar weakness kicks in because the
recovery fund agreement is significant enough "not to prompt
investors to exit their long euro positions," particularly
against the dollar, where the outlook has darkened for the rest
of the year.
The Australian dollar was last up 1.2% at US$0.7099, also
lifted after the central bank offered few surprises in minutes
from last month's meeting. AUD/
In a speech, Governor Philip Lowe said while he would prefer
a cheaper Aussie dollar, its 27% recovery from March lows was
supported by fundamentals.
The New Zealand dollar rose 0.8% to US$0.6623 NZD=D3 .
The Canadian dollar strengthened 0.6% to 1.3447 CAD=D3
Canadian dollars per U.S. dollar..
The dollar fell 0.2% against the yen to 107.01 JPY=EBS .
========================================================
Currency bid prices at 10:16AM (1416 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1465 $1.1444 +0.18% +2.27% +1.1469 +1.1424
Dollar/Yen JPY= 106.9300 107.2400 -0.29% -1.77% +107.3600 +106.9500
Euro/Yen EURJPY= 122.63 122.78 -0.12% +0.56% +123.0200 +122.4800
Dollar/Swiss CHF= 0.9378 0.9387 -0.10% -3.10% +0.9399 +0.9368
Sterling/Dollar GBP= 1.2720 1.2660 +0.47% -4.07% +1.2722 +1.2651
Dollar/Canadian CAD= 1.3452 1.3533 -0.60% +3.59% +1.3537 +1.3438
Australian/Doll AUD= 0.7100 0.7013 +1.24% +1.13% +0.7108 +0.7011
ar
Euro/Swiss EURCHF= 1.0753 1.0745 +0.07% -0.91% +1.0758 +1.0723
Euro/Sterling EURGBP= 0.9012 0.9035 -0.25% +6.60% +0.9050 +0.9002
NZ NZD= 0.6627 0.6574 +0.81% -1.60% +0.6630 +0.6560
Dollar/Dollar
Dollar/Norway NOK= 9.1365 9.2276 -0.99% +4.08% +9.2325 +9.1343
Euro/Norway EURNOK= 10.4771 10.5664 -0.85% +6.50% +10.5796 +10.4658
Dollar/Sweden SEK= 8.9136 8.9506 -0.47% -4.64% +8.9808 +8.9166
Euro/Sweden EURSEK= 10.2214 10.2692 -0.47% -2.37% +10.2813 +10.2244
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Euro vs U.S. dollar https://tmsnrt.rs/30wWQJh
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