FOREX-Dollar treads water against euro; yuan sinks on U.S.-China tensions

* Offshore yuan stumbles to record low
* Yen, Swiss franc under pressure

(Updates to U.S. afternoon, adds trader's comment)
By Saqib Iqbal Ahmed
NEW YORK, May 27 (Reuters) - The dollar steadied against the
euro on Wednesday even as the common currency remained supported
by news of a proposal for an economic recovery package to help
the euro zone region recover from the coronavirus pandemic.
The euro EUR=EBS was up 0.03% against the dollar at
$1.09855, after rising as high as $1.10315, its strongest since
April 1. The common currency gained 0.8% on the greenback on
Tuesday.
The European Union's executive unveiled a 750 billion euro
($825.23 billion) plan on Wednesday to prop up economies
hammered by the coronavirus crisis, hoping to end months of
squabbling over how to fund a recovery that has exposed
faultlines across the 27-nation bloc. "We are certain Euro merits its strength based on just the
high level of cooperation you are witnessing," said Juan Perez,
senior currency trader at Tempus Inc.
"Euro will not falter much, unless this truly ends up not
being doled out at all, which we doubt," he said.
The euro has struggled since falling in March, when
investors rushed for the safety of dollars amid increased
volatility in global financial markets.
Perceived safe-haven currencies, the Japanese yen and the
Swiss franc, came under pressure on Wednesday as investors
looked past increased U.S.-China tensions to bet on riskier
assets in the hopes of a quick rebound from the economic hit
from the coronavirus pandemic.
Against the yen, which tends to draw investors during times
of geopolitical or financial stress given Japan's status as the
world's largest creditor, 0.13the dollar was 0.11% higher.
JPY=EBS
The greenback was up 0.3% against the franc CHF=EBS , after
Swiss National Bank Chairman Thomas Jordan said Swiss monetary
policy must remain accommodative. Worries about the U.S. response to China's proposed security
law for Hong Kong, however, kept safe-haven currencies from
seeing sharper declines.
U.S. Secretary of State Mike Pompeo said he had certified on
Wednesday that Hong Kong no longer warrants special treatment
under U.S. law as it did when it was under British rule, a
potentially big blow to its status as a major financial hub.
The offshore yuan CNH=D3 fell to its lowest level ever
against the against at 7.1966 per dollar. Sterling GBP=D3 retreated below $1.23 as investor focus
shifted back to the possibility of negative interest rates in
Britain and comments from government officials that not much
progress had been made in Brexit negotiations.

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GRAPHIC: U.S. dollar vs offshore yuan https://tmsnrt.rs/2M7srKJ
GRAPHIC: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
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