* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Euro zone business growth stalls, UK economy loses momentum
* Fed ambiguity helped dollar demand
* Response to second wave of virus rattles investors
(Updates prices, adds commentary)
By Sinéad Carew
NEW YORK, Sept 23 (Reuters) - The dollar gained for the fourth day in a row and traded at a more than
eight-week high on Wednesday, as U.S. equities fell and investors questioned the pace of the global
economic recovery on rising coronavirus cases and weak economic data in Europe while investors grappled
with U.S. policy uncertainty.
The tone for the day was set after data showed euro zone business growth ground to a halt in
September, raising fears that fresh restrictions to quell a resurgence in coronavirus infections might put
the economic recovery into jeopardy.
In Britain, the economy also lost momentum, a business survey showed, as consumer-facing sectors
suffered, notably from the end of a government subsidy to support restaurants.
"The market continues to re-evaluate its previously very optimistic stance on the status of global
risks out there," said Ben Randol, senior FX strategist at BofA Securities in New York.
"The newsflow has been negative on the virus and negative on growth. We've had some crummy data and
also we've had the Fed speakers that have been on balance considerably less dovish than the market seemed
to expect, which puts positions at risk," Randol said.
Randol also cited comments from the Federal Reserve after Chicago Federal Reserve President Charles
Evans sent investors to the safety of the dollar on Tuesday by floating the idea of rate hikes.
Fed Vice Chair Richard Clarida said Wednesday that policymakers "are not even going to begin thinking"
about raising interest rates until inflation hits 2%. To Randol, this suggests the Fed is reserving its right "to pre-emptively lift rates" if it sees
inflation as problem."
Others said a lack of clarity in the Fed's comments has boosted dollar demand. People were hoping the
Fed would be more specific about its medium- and long-term goals last week, according to Thierry Wizman,
global interest rates and currencies strategist at Macquarie Ltd in New York.
"The various Fed speeches since then have not really fixed the matter. They continue to be very
ambiguous. People who have been short the dollar for the last few months are taking it as an opportunity
to unwind their positions," said Wizman.
The dollar index =USD , which measures the greenback against a basket of six major currencies, added
to gains as the session wore on and U.S. equities steepened their decline. It was last up 0.43% at 94.385
after earlier hitting 94.435, its highest level since July 24.
The euro was down 0.42% at $1.1657, after falling in the late afternoon to a low for the session so
far of $1.16515 EUR=D3 , its lowest since July 27.
Traders in the pound and the euro were also worried that Britain and the European Union will fail to
agree on a free trade deal, which would cause additional economic strain. The pound GBP=D3 regained some ground as the session wore on and last traded down 0.09% at 1.2719
after falling earlier to $1.2676, its lowest level since late July.
It had came under pressure after British Prime Minister Boris Johnson introduced on Tuesday new
restrictions to combat a second wave of the coronavirus. The Australian dollar AUD=D3 was last down 1.34% at US$0.7078, after earlier hitting $0.70720, its
lowest level since July 24. The New Zealand dollar NZD=D3 dropped 1.39% to $0.6521.
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Currency bid prices at 3:19PM (1919 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1657 $1.1706 -0.42% +3.99% +1.1718 +1.1652
Dollar/Yen JPY= 105.4100 104.9100 +0.48% -3.17% +105.4800 +104.9100
Euro/Yen EURJPY= 122.89 122.83 +0.05% +0.76% +123.1900 +122.6000
Dollar/Swiss CHF= 0.9237 0.9192 +0.49% -4.56% +0.9243 +0.9190
Sterling/Dollar GBP= 1.2719 1.2731 -0.09% -4.07% +1.2776 +1.2677
Dollar/Canadian CAD= 1.3371 1.3301 +0.53% +2.96% +1.3381 +1.3294
Australian/Doll AUD= 0.7078 0.7174 -1.34% +0.81% +0.7177 +0.7072
ar
Euro/Swiss EURCHF= 1.0771 1.0767 +0.04% -0.75% +1.0784 +1.0754
Euro/Sterling EURGBP= 0.9163 0.9193 -0.33% +8.39% +0.9218 +0.9138
NZ NZD= 0.6542 0.6634 -1.39% -2.88% +0.6647 +0.6536
Dollar/Dollar
Dollar/Norway NOK= 9.4851 9.3393 +1.56% +8.05% +9.4961 +9.3338
Euro/Norway EURNOK= 11.0602 10.9480 +1.02% +12.42% +11.0663 +10.9260
Dollar/Sweden SEK= 9.0128 8.9076 +0.75% -3.58% +9.0188 +8.9086
Euro/Sweden EURSEK= 10.5088 10.4305 +0.75% +0.38% +10.5120 +10.4307