FOREX-Dollar heads toward weekly gain as oil shock reveberates

* Dollar index up 0.8% for week as commodity currencies,
euro drag
* Aussie, kiwi wobble lower in choppy trade
* Euro near month low on EU rescue package division
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, April 24 (Reuters) - The dollar was headed for
its best week since early April on Friday, as tumbling oil
prices weighed on commodity currencies and division over
Europe's emergency fund dragged on the euro.
The dollar stands near a two-and-a-half week high against a
basket of currencies =USD and is 0.8% stronger for the week.
It is up nearly 3% against the oil-sensitive Norwegian krone
NOK= and about 1% on the euro EUR= .
Morning moves were modest and led by a drift lower in the
Australian and New Zealand dollars as traders were unnerved by
inconclusive results from a Gilead antiviral drug trial and
looking to headlines for further direction. "I'm running with a more bearish story for the next two or
three weeks," said Westpac FX analyst Imre Speizer.
"The economic data is going to be horrible. I'm betting that
markets will be shocked by it, even though we know it's coming,
and that will cause risk sentiment to fall," he said.
The Aussie and kiwi each shed about 0.2%, holding the kiwi
NZD=D3 below 60 cents at $0.5987 and the Aussie AUD=D3 at
$0.6356, beneath resistance around 64 cents.
Both had rallied through those levels overnight as markets
shrugged off dire economic news in Europe and the United States
and commodity prices forged ahead. O/R
The euro fell to a one-month low of $1.0756 on Thursday, and
was drifting back to test that level on Friday after the
European Union agreed to build a trillion euro emergency fund,
but left the details for later.
With Italy and Spain hit far harder than Germany by the
crisis, old enmities have surfaced across a bloc which faces a
cut to output as deep as 15% according to the European Central
Bank.
"We have no idea how it will be funded and this is not the
panacea to stop an impending 15% contraction in GDP," said Chris
Weston, head of research at Melbourne brokerage Pepperstone.
The euro last sat at $1.0776. The British pound GBP= was
steady at $1.2352, which is down about 1.1% for the week, and
the Japanese yen JPY= softened slightly to 107.70 per dollar.
Preliminary goods-orders data in the United States and a
German business sentiment survey due later on Friday are
unlikely to improve investors' mood - especially as the global
recovery begins to look increasingly rocky.
"It seems that we are experiencing an economic contraction
that is faster and deeper than anything we have seen in the past
century, or possibly several centuries," Bank of England
official Jan Vlieghe said overnight. A slow, U-shaped recovery was more likely than a quick,
V-shaped rebound, he said.