FOREX-Euro set for seventh day of gains, dollar loses to riskier assets

* Euro/Swiss franc highest since January
* Dollar index falls to nearly three-month low
* Australian dollar highest in five months vs US dollar
* Norwegian crown best G10 currency year-to-date
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds news about New Zealand and EUR overnight vol)
By Olga Cotaga
LONDON, June 3 (Reuters) - The euro topped an 11-week high
on Wednesday, on track for a seven-day winning streak, and the
dollar fell against most currencies as the prospects of more
stimulus and hopes for economic recovery led investors to buy
riskier assets.
Overnight euro implied volatility gauges jumped to 12%,
their highest in one month, suggesting traders were preparing
for moves bigger than usual in the common currency. EURONO=FN
The Australian dollar hit a five-month high of 0.6982
against the U.S. dollar AUD=D4 , as funds sought exposure to
economies expected to make the fastest recoveries from the
coronavirus pandemic.
The U.S. dollar also fell against the British pound, the
Norwegian and Swedish crowns, and the Canadian dollar as mass
protests against racism across the United States weighed on the
currency.
An index of the dollar against six major currencies =USD
fell to nearly a three-month low of 97.28.
"The strengthening of the risk-linked Aussie and Kiwi,
combined with the weakness of the safe-havens dollar, yen, and
franc, suggests that investors continued increasing their risk
exposures for another day," Charalambos Pissouros, senior market
analyst at JFD Group, said.
"It seems that investors are still looking past the
U.S.-China tensions and the civil unrest in the U.S.," he said.
President Donald Trump has threatened to use the military to
quell protests against racism and police brutality. U.S. stocks
continue to rally, however, leaving some currency traders
confused about the market's direction. preferred to bet on a global economic recovery.
Dollar/yen was last up 0.1% at 108.79 JPY=EBS .
The euro reached an 11-week high of $1.1125 on expectations
policymakers will support the euro zone's weakest economies with
debt purchases. The common currency was last up 0.4%. The
seven-day winning streak was the longest since December 2013.
The euro also rose against the Swiss franc to $1.0797
EURCHF=EBS , the highest since Jan. 14, trading last up 0.4%.
The euro disregarded a contraction in economic activity in
May reported by IHS Markit's Final Composite Purchasing
Managers' Index (PMI). In addition, the number of people that lost their jobs in
the euro zone in April was 211,000, bringing the number of the
unemployed to 11.919 million or 7.3% of the workforce, up from
7.1% in March. But investors did care about expectations the European
Central Bank will increase its 750 billion-euro ($839.25
billion) bond-buying programme, the Pandemic Emergency Purchase
Programme, when it meets on Thursday.
Investors also hoped a 750 billion-euro recovery fund
proposed by the European Commission would soon take form and
bolster-the worst performing countries in the bloc.
But Kit Juckes, macro strategist at Societe Generale, said
he was "more wary of the euro than some other currencies"
because he doubted the implementation of the recovery fund as
proposed and that the ECB could continue to inject liquidity
into markets, due to a German court ruling a few weeks ago.
The Chinese yuan rose to nearly a one-month high of 7.0883
against the dollar in the offshore market CNH=EBS . China was
the first major economy to ease strict lockdown restrictions,
making it likely to recover earlier than other countries.
The Norwegian crown hit a three-month high of 9.4735 against
the U.S. dollar NOK=D3 , last trading up 0.8%. The currency is
so far the best performing in the G10 space.
The New Zealand dollar was up 0.3% NZD=D4 , after earlier
reaching a three-month high of 0.6430. New Zealand Prime
Minister Jacinda Ardern said on Wednesday she could lift all
social-distancing measures to return the country to normal life,
bar the international border closure, as early as next week.
The Aussie dollar was last neutral at 0.6895.

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Euro rises for 7 days https://tmsnrt.rs/2U5CtR2
Euro reverses swiss franc strength https://tmsnrt.rs/2XtnfaQ
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