FOREX-Dollar eases off 7-week low as COVID-19 aid bill in doubt

By John McCrank
NEW YORK, Oct 22 (Reuters) - The dollar index ticked higher
on Thursday, easing off a seven-week low as hopes for a
coronavirus aid package ahead of the U.S. elections faded and
COVID-19 cases surged around the world, giving a slight bid to
safe-haven assets like the greenback.
Investors were also digesting new U.S. jobless claims data
that showed a bigger-than-expected drop, but remained at
extremely high levels amid fading fiscal stimulus and a
resurgent coronavirus.
U.S. House of Representatives Speaker Nancy Pelosi said on
Thursday negotiations toward a new relief bill were making
progress and that legislation could be hammered out "pretty
soon." The talks had been thrown into doubt after Republican
President Donald Trump took to Twitter late on Wednesday to
accuse Democrats of being unwilling to find an acceptable
compromise and amid deep opposition among Senate Republicans to
a large new stimulus package. "The market is getting a little tired of going back and
forth on the stimulus talks," said Joseph Trevisani, senior
analyst at FXStreet.com.
"It doesn't seem right now that either side is going to make
enough concessions in view of the election, which makes sense
actually, as far as their needs go, to get a deal done," he
said.
The stimulus package is likely to come up when Trump faces
off against Democratic rival Joe Biden later on Thursday in
their final debate ahead of the Nov. 3 vote. The dollar index =USD was last trading at 92.932, up 0.22%
and above Wednesday's bottom of 92.469, which marked the lowest
level since Sept. 2, but still trading back and forth within a
tight range.
"The near possibility that we're going to get more bad news
or at least no good news from now to the election is driving
investors out of the greenback," said Kathy Lien, managing
director at BK Asset Management.
News that Europe has seen the number of coronavirus cases
surge to a record high, with Spain becoming the first Western
European country to exceed 1 million infections, added to the
cautious tone in world markets. The euro EUR=EBS was down 0.35% higher versus the dollar
at $1.1820, after hitting a one-month high of $1.18805 on
Wednesday.
"The euro has been undeservingly strong, given the
significant increases in COVID-19 cases and the fact that the
ECB will have no choice but to lower interest rates," said Lien.
PMI reports from the euro zone due out on Friday could
trigger a more aggressive move down in the euro, she added.
Having hit six-week highs on Wednesday amid Brexit optimism,
sterling pulled back against the U.S. currency. The British
pound was last down 0.47% at $1.3082 GBP=D3 .
The Australian dollar AUD=D3 dipped 0.01% versus the
greenback to $0.7116, while the New Zealand dollar rose 0.44% to
$0.6680 NZD=D3 .
Elsewhere, the Chinese yuan retreated from a 27-month high
hit a day earlier on signs the authorities have become
increasingly wary over the currency's recent rapid gains.
The offshore Chinese yuan CNH=EBS was last trading at
6.6710 per dollar.

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Currency bid prices at 2:40PM (1840 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1820 $1.1862 -0.35% +5.43% +1.1867 +1.1812
Dollar/Yen JPY=D3 104.8400 104.5700 +0.27% -3.47% +104.8800 +104.5500
Euro/Yen EURJPY= 123.91 124.02 -0.09% +1.61% +124.0900 +123.6700
Dollar/Swiss CHF=EBS 0.9072 0.9053 +0.22% -6.24% +0.9080 +0.9051
Sterling/Dollar GBP=D3 1.3082 1.3147 -0.47% -1.34% +1.3152 +1.3071
Dollar/Canadian CAD=D3 1.3140 1.3144 -0.02% +1.16% +1.3177 +1.3125
Aussie/Dollar AUD=D3 0.7116 0.7117 -0.01% +1.42% +0.7125 +0.7085
Euro/Swiss EURCHF= 1.0723 1.0737 -0.13% -1.19% +1.0748 +1.0721
Euro/Sterling EURGBP= 0.9034 0.9018 +0.18% +6.86% +0.9046 +0.9015
NZ NZD=D3 0.6680 0.6655 +0.44% -0.67% +0.6688 +0.6634
Dollar/Dollar
Dollar/Norway NOK=D3 9.2480 9.2075 +0.44% +5.43% +9.2600 +9.2020
Euro/Norway EURNOK= 10.9320 10.9390 -0.06% +11.12% +10.9660 +10.8944
Dollar/Sweden SEK= 8.7707 8.7254 +0.16% -6.17% +8.7854 +8.7220
Euro/Sweden EURSEK= 10.3670 10.3503 +0.16% -0.98% +10.3959 +10.3485