FOREX-Dollar gains as investors unwind positions after weakest month in a decade

Published 03/08/2020, 16:03
Updated 03/08/2020, 16:06
© Reuters.
USD/JPY
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DX
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(Updates details and data, changes byline and dateline,
previous LONDON)
* Dollar index gains
* Yen rally halted, USD/JPY falls past 106 mark

By Caroline Valetkevitch
NEW YORK, Aug 3 (Reuters) - The dollar was up against a
basket of currencies on Monday as investors unwound some recent
short positions following the currency's weakest monthly
performance in a decade.
The dollar index =USD , which measures the greenback
against a basket of leading currencies, posted a more than 4%
decline for July, its biggest monthly drop since September 2010.
The weakness has been tied to market expectations for further
easing of U.S. monetary policy, and a lack of agreement among
U.S. lawmakers on further fiscal stimulus. Falling U.S. bond
yields have also been cited as a factor.
The day's gains may be tied to investors partially moving out
of the crowded short position, strategists said.
"Sentiment was overdone," said Marc Chandler, chief market
strategist at Bannockburn Global Forex. "The swing in the
pendulum of market sentiment hit such an extreme," which allowed
for some unwinding of those short positions, he said.
"I don't expect it to last long," he added.
The dollar pared gains following weaker-than-expected U.S.
economic data. U.S. construction spending fell to a one-year low
in June; economists had forecast an increase. The dollar index was last up 0.5% =USD at 93.836.
Speculators' net shorts on the U.S. dollar have soared to
their highest since August 2011 at $24.27 billion, Reuters
calculations and U.S. Commodity Futures Trading Commission data
show. IMM/FX
Against the Japanese yen, the dollar gained 0.4% to push
past the 106-yen-per dollar mark. JPY=
On Friday, the dollar posted its biggest daily rise against
the Japanese currency since March, halting a rally in the yen
which saw it gain 3% in July.
Japanese Finance Minister Taro Aso described the yen's
recent rise as "rapid" on Friday, signaling concern that a
strong currency could do more damage to an export-led economy
already in recession. A growing U.S. fiscal deficit to finance the stimulus
prompted Fitch Ratings to revise its outlook on the United
States' triple-A rating to negative from stable. Sentiment on the euro has improved after European Union
leaders agreed last month to a 750 billion euro ($882 billion)
economic recovery fund while also taking on debt jointly in a
show of regional cooperation.
The single currency last traded at $1.1727 EUR=EBS , down
0.4%. It hit a two-year high of $1.1908 reached last week.

========================================================
Currency bid prices at 10:47AM (1447 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1727 $1.1774 -0.40% +4.62% +1.1796 +1.1698
Dollar/Yen JPY= 106.3000 105.8800 +0.40% -2.35% +106.4600 +105.5900
Euro/Yen EURJPY= 124.69 124.68 +0.01% +2.25% +125.0600 +124.0200
Dollar/Swiss CHF= 0.9237 0.9127 +1.21% +0.00% +0.9240 +0.9115
Sterling/Dollar GBP= 1.3012 1.3088 -0.58% +0.00% +1.3111 +1.3006
Dollar/Canadian CAD= 1.3419 1.3413 +0.04% +3.33% +1.3450 +1.3390
Australian/Doll AUD= 0.7087 0.7142 -0.77% +0.94% +0.7149 +0.7077
ar
Euro/Swiss EURCHF= 1.0834 1.0755 +0.73% +0.00% +1.0838 +1.0754
Euro/Sterling EURGBP= 0.9011 0.8995 +0.18% +0.00% +0.9014 +0.8983
NZ NZD= 0.6579 0.6632 -0.80% +0.00% +0.6642 +0.6576
Dollar/Dollar
Dollar/Norway NOK= 9.1553 9.0860 +0.76% +0.00% +9.1763 +9.0729
Euro/Norway EURNOK= 10.7394 10.7416 -0.02% +0.00% +10.7861 +10.6923
Dollar/Sweden SEK= 8.7827 8.7680 -0.43% +0.00% +8.8083 +8.7556
Euro/Sweden EURSEK= 10.3003 10.3450 -0.43% +0.00% +10.3515 +10.2885


<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: Dollar's worst monthly performance in a decade https://tmsnrt.rs/3k28ghc
GRAPHIC: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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