Constellation Energy and Vistra stock surge after PJM capacity auction results
* Dollar recovers after Tuesday's drop on impeachment
inquiry
* Pound falls on lingering political risks
(New throughout, updates rates and adds comments post-U.S.
market open; new byline, changes dateline, previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Sept 25 (Reuters) - The dollar rebounded on
Wednesday as investors were drawn to its safe-haven appeal a day
after news of the launch of a formal impeachment inquiry against
U.S. President Donald Trump drove a sharp move lower in risky
assets.
Increased political uncertainty and lingering worries about
the state of the trade talks between Washington and Beijing at a
time when global economic growth is slowing worked in favor of
the U.S. currency on Wednesday.
The greenback is viewed as safe-haven due to its standing as
the world's reserve currency.
"I think that overall the dollar's safe haven status is
understood," said Juan Perez, senior currency trader at Tempus
Inc in Washington.
The dollar index .DXY , which measures the U.S. currency
against six major currencies, was up 0.6%. On Tuesday, the index
had slipped 0.3% to finish the session at 98.337.
Adam Cole, a currency analyst at RBC Capital Markets, said
the immediate reaction to sell the dollar was questionable.
"For a couple of reasons it's not a sell risk or sell dollar
story," he said, pointing to the very small chance that Trump
would be impeached, and his view that if the president left
office it would not necessarily be positive for risky assets.
Trump asked Ukraine's president in a July phone call to
investigate whether a political rival, former Vice President Joe
Biden, had shut down an investigation into a gas company that
employed his son, according to a summary of the call released by
the Trump administration on Wednesday. The dollar was also benefiting from a sharp pull pack for
the British pound GBP= amid worries that Brexit and general
election related risks showed no signs of going away soon.
Meanwhile, Trump's rhetoric on China turned harsh on Tuesday
as he criticized Beijing's trade practices during a speech at
the United Nations General Assembly, feeding worries that the
resolution to U.S.-China trade war remains elusive.
"There are political battles brewing on both sides of the
Atlantic and with China and the U.S. not having the friendliest
of tones during addresses at the United Nations, I feel like we
are back at deep uncertainty," Tempus' Perez said.
"With little real economic growth to speak of globally, we
see why the buck is stubbornly strong to end the third quarter,"
he said.
The euro EUR= , which has been dogged by worries about the
dismal state of the euro zone economy, shed 0.5% on Wednesday.
The pound fell about 1% on Wednesday against the dollar,
ceding gains made the previous day after the Supreme Court's
ruling against Prime Minister Boris Johnson, as investors priced
many more months of Brexit and general election risk.
Euro vs U.S. dollar https://tmsnrt.rs/2mAPAvJ
Graphic: World FX rates in 2019: http://tmsnrt.rs/2egbfVh
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(Editing by Marguerita Choy and David Clarke)