* Euro hits nearly 2-year high vs dollar
* Yuan recovers to trade around 7 per dollar
* U.S. jobless claims rise, add to dollar bearishness
* U.S. coronavirus cases surge again
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 23 (Reuters) - The dollar dropped to its lowest in nearly two years on Thursday, as
investors continued to sell the buck on expectations the U.S. economy will likely underperform its peers
in the developed world with the surge in new coronavirus cases.
By contrast, the euro rose to its highest since early October 2018, still basking in the glow of the
European recovery fund approved earlier this week.
A rise in U.S. jobless claims last week, the first time in four months, also added to the dollar's
woes, as a persistent increase in COVID-19 cases has derailed the labor market and dampened consumer
demand.
"There has been a turn in dollar sentiment," said Marc Chandler, chief market strategist, at
Bannockburn Forex in New York. "Two months ago, my dollar bearishness was not a consensus view. I think
now it has become pretty much consensus."
U.S. coronavirus cases approached 4 million on Thursday, with over 2,600 new cases every hour on
average, the highest rate in the world, according to a Reuters tally. In midday trading, the dollar index was down 0.4% at 94.621 =USD , after hitting its lowest since
late September 2018. It has lost nearly 8% since its March 20 peak, when a global dollar funding crunch
saw a surge in demand.
The dollar briefly edged higher after U.S. Treasury Secretary Steven Mnuchin said the U.S. government
will protect the stability of the currency. Against the Japanese yen, the dollar was down 0.3% at 106.82 yen JPY=EBS .
The U.S. currency was also down 0.5% against the Swiss franc at 0.9252 franc CHF=EBS . Earlier it
dropped to a more than four-month low.
Still, some analysts believe the dollar's sell-off is overdone, especially against the euro, and the
buck will likely bounce back.
"The market believes Europe handled the virus well. However, cases in Spain are going up again," said
Momtchil Pojarliev, head of currencies at BNP Asset Management in New York.
The euro EUR=EBS was up 0.4% at $1.1615, hitting a fresh 21-month high of $1.1601 hit earlier on
Wednesday.
The Australian dollar AUD=D3 retreated from a 15-month peak against the greenback to around
US$0.7125, down 0.2%, while the New Zealand dollar NZD=D3 fell 0.2% to US$0.6651, below Wednesday's
six-month top of US$0.6678.
Elsewhere, China's offshore yuan partially recovered losses from an earlier slide against the U.S.
dollar, which was last down 0.1% at 7.009 yuan CNH=EBS .
The United States gave China until Friday to close its consulate in Houston following allegations of
spying. Currency bid prices at 1:02PM (1702 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1620 $1.1568 +0.45% +3.66% +1.1626 +1.1541
Dollar/Yen JPY= 106.8100 107.1400 -0.31% -1.88% +107.2200 +106.8100
Euro/Yen EURJPY= 124.12 123.97 +0.12% +1.78% +124.2400 +123.7200
Dollar/Swiss CHF= 0.9246 0.9295 -0.53% -4.46% +0.9301 +0.9247
Sterling/Dollar GBP= 1.2745 1.2732 +0.10% -3.88% +1.2759 +1.2674
Dollar/Canadian CAD= 1.3355 1.3415 -0.45% +2.84% +1.3427 +1.3351
Australian/Doll AUD= 0.7126 0.7138 -0.17% +1.50% +0.7161 +0.7091
ar
Euro/Swiss EURCHF= 1.0746 1.0753 -0.07% -0.98% +1.0762 +1.0716
Euro/Sterling EURGBP= 0.9117 0.9084 +0.36% +7.84% +0.9124 +0.9082
NZ NZD= 0.6652 0.6661 -0.14% -1.25% +0.6689 +0.6631
Dollar/Dollar
Dollar/Norway NOK= 9.1800 9.1389 +0.45% +4.57% +9.2214 +9.1055
Euro/Norway EURNOK= 10.6694 10.5970 +0.68% +8.45% +10.6725 +10.5523
Dollar/Sweden SEK= 8.8410 8.8549 +0.10% -5.42% +8.9113 +8.8304
Euro/Sweden EURSEK= 10.2760 10.2657 +0.10% -1.85% +10.2880 +10.2420
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Dollar's performance in 2020 https://tmsnrt.rs/2E8xdqJ
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