FOREX-Dollar set for weekly loss as economic confidence sags

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Eimi Yamamitsu
TOKYO, Sept 18 (Reuters) - The dollar held tight ranges on
Friday but was set for a weekly loss against major counterparts
after downbeat data cast a shadow over the economic outlook,
while positive comments from New Zealand's finance minister
helped prop up the kiwi.
The dollar =USD gave up gains made after the Federal
Reserve upgraded its 2020 economic forecast this week to trade
in negative territory on Thursday. It was last quoted at 92.923
against a basket of major currencies, on track for a 0.3% weekly
loss.
U.S. data on Thursday showed jobless claims remained
elevated at 860,000, while housing starts and the Philadelphia
Fed business index fell.
The Fed said on Wednesday it expected the U.S. economy to
shrink by far less than previously forecast in 2020 and promised
to keep rates ultra-low for a prolonged period.
The dollar was little changed against the yen at 104.81
JPY= , after hitting a seven-week high at 104.52 on Thursday.
For the week, the dollar fell more than 1.2% against the
Japanese currency, set for the biggest fall since mid-June.
Against the euro, the yen hovered near the 1-1/2 month high
of 123.29 touched overnight, changing hands at 124.18 EURJPY= .
"The dollar/yen dropped overnight almost too much, although
it's been falling since Monday," said Masafumi Yamamoto, chief
currency strategist at Mizuho Securities.
He said losses in U.S. stock futures NQc1 EScv1 were
also contributing to a weaker dollar.
Markets held tight ranges in Asia although the New Zealand
dollar hit a two-week high of $0.6785 NZD=D3 after Finance
Minister Grant Robertson sounded positive about the economy's
recovery prospects in television interviews.
Economic improvement may stave off the negative rates that
all four New Zealand banks are expecting to see in 2021.
Adding to broader risk aversion, U.S. stocks fell on
Thursday as technology-related shares slid for a second day, and
as economic data weighed on the wider market.
"For the dollar to regain its upward trend, it's necessary
for the market to make sure that the U.S. stocks take a pause
from a correction in stock prices," Yamamoto said.
Sterling bought $1.2959 GDP= , having lost around one cent
on Thursday after the Bank of England said it was looking more
closely at how it might implement negative interest rates amid
rising coronavirus infection cases, higher unemployment and a
possible new Brexit shock. But the pound later erased losses after the Financial Times
reported that European Commission President Ursula Von der Leyen
said she was convinced a trade deal with Britain was still
possible. The euro, meanwhile, was little changed at 1.1849 per dollar
on Friday EUR= . The euro zone PMI data next week will be a key
focus, with some analysts saying a strong PMI could take the
common currency back to the 1.19 level versus the dollar.
The Australian dollar changed hands at $0.7310 AUD=D3 ,
while the Swiss franc was last quoted at 0.9086 against the
greenback CHF=EBS .
The offshore yuan CNH=D3 was trading at 6.7521 per dollar
after hitting a high of 6.7332, set for an eighth straight week
of gains.
The yuan has risen more than 6% from lows against the dollar
in late May as China's economy recovered from the coronavirus
crisis, although its rapid rise has raised some concerns.