* Longest U.S. economic expansion stay intact - Fed's Beige
Book
* Dollar overvalued; euro, yen, yuan in line - IMF
* Sterling recovers after hitting 27-month low vs dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, adds quote)
By Richard Leong
NEW YORK, July 17 (Reuters) - The dollar softened against
most major currencies on Wednesday in step with lower U.S. bond
yields and expectations the Federal Reserve would lower interest
rates, reversing some of the prior day's gains tied to
stronger-than-forecast retail sales data.
The pound fell to 27-month lows versus the greenback on
jitters about a no-deal Brexit before rebounding in U.S.
trading.
"With the market pricing for lower interest rates, that's
keeping a lid on the dollar," said Chris Gaffney, president of
world markets at TIAA Bank in St. Louis.
The greenback was also bogged down by uncertainties whether
the White House would embark on efforts to weaken the dollar in
the wake of comments from U.S. President Donald Trump who said
on Twitter on July 3 the United States "should match" the "big
currency manipulation game" by China and Europe. "Anytime you have the president commenting on the need for a
weaker dollar, that would pressure the dollar lower," Gaffney
said.
Moreover, the International Monetary Fund on Wednesday said
the greenback was overvalued by 6% to 12%, based on near-term
economic fundamentals, while the euro, Japan's yen and China's
yuan were seen as broadly in line with fundamentals.
The euro hit a one-week low against the dollar and towards
the lower end of this year's trading range, weighed down by
expectations of easing from the European Central Bank and
investors' preference for the higher-yielding U.S. currency.
The euro EUR=EBS fell to $1.1200 earlier Wednesday before
clawing back up 0.10% on the day to $1.1223.
The dollar JPY=EBS was 0.13% lower at 108.095 yen.
The pound GBP=D3 fell to a fresh 27-month low of $1.2382
before rebounding to $1.2433. It also hit a fresh six-month low
against the euro at 90.51 pence EURGBP=D3 . GBP/
An index that tracks the dollar against the euro, yen, pound
and three other currencies .DXY was down 0.20% at 97.204 after
touching a one-week high.
Benchmark U.S. 10-year yields US10YT=RR fell 5.70 basis
points to 2.063%. The greenback has strengthened since late June in response
to better-than-expected data on U.S. jobs, inflation and retail
sales. Its rise has been limited by stronger signals from
Federal Reserve officials of a possible rate decrease perhaps in
two weeks to counter the risk from global trade tensions and
sluggish price growth at home.
The Fed's latest Beige Book on Wednesday showed the longest
U.S. economic expansion remained intact amid risk from trade
disputes. U.S. interest rates futures implied traders fully expect the
Fed to cut rates at its upcoming policy meeting on July 30-31
with a 35% chance for a half-point decrease, CME Group's
FedWatch tool showed.
========================================================
Currency bid prices at 2:50PM (1850 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1221 $1.1209 +0.11% -2.16% +1.1233 +1.1201
Dollar/Yen JPY= 108.0900 108.2200 -0.12% -1.97% +108.3200 +108.0200
Euro/Yen EURJPY= 121.30 121.33 -0.02% -3.90% +121.4800 +121.2100
Dollar/Swiss CHF= 0.9869 0.9877 -0.08% +0.56% +0.9907 +0.9866
Sterling/Dollar GBP= 1.2434 1.2403 +0.25% -2.53% +1.2456 +1.2383
Dollar/Canadian CAD= 1.3046 1.3086 -0.31% -4.33% +1.3093 +1.3035
Australian/Doll AUD= 0.7015 0.7012 +0.04% -0.48% +0.7024 +0.6997
ar
Euro/Swiss EURCHF= 1.1078 1.1074 +0.04% -1.56% +1.1110 +1.1071
Euro/Sterling EURGBP= 0.9024 0.9034 -0.11% +0.45% +0.9051 +0.9015
NZ NZD= 0.6737 0.6700 +0.55% +0.30% +0.6746 +0.6698
Dollar/Dollar
Dollar/Norway NOK= 8.5816 8.5727 +0.10% -0.66% +8.5933 +8.5653
Euro/Norway EURNOK= 9.6284 9.6101 +0.19% -2.80% +9.6348 +9.6107
Dollar/Sweden SEK= 9.3635 9.3884 -0.16% +4.46% +9.4048 +9.3540
Euro/Sweden EURSEK= 10.5101 10.5269 -0.16% +2.40% +10.5367 +10.5069
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GRAPHIC-Trade tensions boost U.S. rate-cut expectations https://tmsnrt.rs/2KdE2by
GRAPHIC-Bets on bold first rate-cut from the Fed interactive
https://tmsnrt.rs/2Y3UHTf
GRAPHIC-Bets on bold first rate-cut from the Fed https://tmsnrt.rs/2XTkkpn
GRAPHIC-Trade tensions boost U.S. rate-cut expectations
interactive https://tmsnrt.rs/2KdDNxa
GRAPHIC-Euro 1-month implied volatility https://tmsnrt.rs/2NYofAO
GRAPHIC-Euro net short positions https://tmsnrt.rs/32uh2f7
GRAPHIC-Bund yield set to fall below ECB deposit rate https://tmsnrt.rs/2YqE2cu
GRAPHIC-Bund yield set to fall below ECB deposit rate
interactive https://tmsnrt.rs/2YtKj7d
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