* Focus on U.S. equities after hedge fund default
* Euro on track for biggest monthly drop since July 2019
* Yen one of worst performing currencies in Q1
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Recasts, adds new comment, updates prices, changes byline,
dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 29 (Reuters) - The dollar gained on Monday
in choppy trading, with the euro languishing below $1.18 and
commodity currencies falling, as the currency drew some
safe-haven bids on concerns about the potential fallout of a
hedge fund's default on margin calls.
The dollar index, a measure of the greenback's value against
six other major currencies, hit as high as 92.919 =USD , its
strongest level since November last year. It was last marginally
up at 92.825.
U.S. stocks traded lower after global banks said they faced
potential losses from a hedge fund's default, identified as
Archegos Capital, which analysts said was tied to big U.S. media
and Chinese tech companies. "Focus today is on how U.S. equities perform, especially
given the hedge fund default that came out last week," said
Simon Harvey, senior FX market analyst at Monex Europe in
London.
Harvey, however, said the Archegos impact remained limited
for now, given that the effect was concentrated on a few
companies. But some analysts said the fallout could spread
further and weigh on other markets.
The euro, meanwhile, struggled on Monday as the prospect of
tougher coronavirus curbs in France and Germany dimmed the
short-term outlook for the European economy.
The single European currency EUR=EBS slipped 0.1% to
$1.1778, not far from last week's four-and-a-half-month trough
of $1.1762. On a monthly basis, it was down 2.3%, its biggest
drop since July 2019.
Compounding the euro's woes have been the widening
differentials between German and U.S. yields. The spread for
10-year debt widened to 200 basis points from 150 basis points
at the start of the year, boosting the dollar.
"The U.S. economy is much stronger and miles ahead in the
immunization game compared to Europe's and Japan's, and this
ultimately translates into the Fed normalizing policy years
before the ECB or the BoJ," said Marios Hadjikyriacos, a
strategist at brokerage XM.
YEN SHORTS GROW
Weekly positioning data showed the broad trend of growing
dollar bullishness remained in play. Hedge funds cut their
overall short dollar bets to their lowest levels since June 2020
while ramping up their bearish bets on the yen. Short yen positions have grown in recent weeks with hedge
funds building their net short bets to 33% of open interest,
according to ING data.
Steadying stock markets offered some support for the yen,
but falling bond yields and expectations of a global economic
rebound have rekindled short bets. The yen is among the worst-
performing currencies so far this quarter, down 6% against the
dollar.
The dollar was last up 0.1% against the Japanese currency at
109.74 yen JPY=EBS .
Virus-driven caution also helped the dollar higher against
the Australian and New Zealand dollars and sterling, and it rose
against oil-linked currencies as the re-floating of the ship
blocking the Suez Canal pushed crude prices down by about 1.5%.
The Aussie AUD=D3 was last down 0.1% at US$0.7636 on
Monday and the New Zealand dollar NZD=D3 was slightly down at
US$0.7002. Sterling GBP= slipped to $1.3790.
========================================================
Currency bid prices at 10:34AM (1434 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 92.8180 92.7830 +0.05% 3.153% +92.9190 +92.7160
Euro/Dollar EUR=EBS $1.1779 $1.1794 -0.14% -3.60% +$1.1795 +$1.1763
Dollar/Yen JPY=EBS 109.7200 109.6800 +0.04% +6.19% +109.7950 +109.3800
Euro/Yen EURJPY= 129.24 129.33 -0.07% +1.82% +129.4200 +128.8500
Dollar/Swiss CHF=EBS 0.9385 0.9393 -0.06% +6.10% +0.9404 +0.9373
Sterling/Dollar GBP=D3 $1.3792 $1.3799 -0.09% +0.91% +$1.3846 +$1.3757
Dollar/Canadian CAD=D3 1.2596 1.2571 +0.21% -1.08% +1.2627 +1.2578
Aussie/Dollar AUD=D3 $0.7634 $0.7642 -0.08% -0.73% +$0.7655 +$0.7616
Euro/Swiss EURCHF= 1.1055 1.1073 -0.16% +2.29% +1.1078 +1.1038
Euro/Sterling EURGBP= 0.8538 0.8552 -0.16% -4.45% +0.8562 +0.8507
NZ NZD=D3 $0.7002 $0.7000 +0.04% -2.49% +$0.7015 +$0.6973
Dollar/Dollar
Dollar/Norway NOK=D3 8.5415 8.5945 -0.58% -0.49% +8.6165 +8.5435
Euro/Norway EURNOK= 10.0600 10.1050 -0.45% -3.89% +10.1534 +10.0560
Dollar/Sweden SEK= 8.6953 8.6398 +0.53% +6.09% +8.7014 +8.6399
Euro/Sweden EURSEK= 10.2423 10.1880 +0.53% +1.65% +10.2473 +10.1890
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World FX rates https://tmsnrt.rs/2RBWI5E
Yen positions https://tmsnrt.rs/3fkjRZ6
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