* Euro sags below $1.12 to lowest since late May
* IMF raises U.S. growth view, lowers global growth outlook
* Sterling slips as Johnson succeeds May as UK prime
minister
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, changes dateline, previous LONDON)
By Richard Leong
NEW YORK, July 23 (Reuters) - The dollar on Tuesday rose to
near a five-week high against a basket of currencies after
President Donald Trump and U.S. lawmakers reached a two-year
deal that raises the limits on government borrowing to cover
spending.
The agreement averted another partial government shutdown. A
35-day shutdown between December and January led to a furlough
of 800,000 federal workers and cost the economy about $3
billion. As a result of this deal, the U.S. Treasury can ramp its
short-term borrowing to rebuild a cash pile that has fallen to
about $195 billion from $423 billion in late April, Morgan
Stanley analysts said.
An increase in U.S. borrowing would pare money in the
banking system, which is seen supportive for the greenback.
"Excess reserves should decline, lending (dollar) support,"
Morgan Stanley strategists Hans Redeker, Gek Teng Khoo and
Sheena Shah wrote in a research note.
The dollar's appeal got a boost after the International
Monetary Fund raised its forecast on U.S. growth in 2019 to 2.6%
while lowering its overall global growth outlook to 3.2% for
this year. At 10:11 a.m. (1411 GMT), an index that tracks the greenback
versus the euro, yen, sterling and three other currencies .DXY
was up 0.39% at 97.638. It touched 97.708, its highest level in
about five weeks.
The dollar's strength also stemmed from broad weakness in
the euro EUR=EBS as investors gear up for news of fresh
stimulus from the European Central Bank on Thursday.
Though money markets have trimmed bets on a 10 basis point
deposit rate cut from the ECB to less than 40% from roughly 60%
on Friday, analysts expect dovish forward guidance and possibly
more generous terms for its planned new multi-year
loans. "The market has doubts in the ECB keeping its limited powder
dry this week, the driving force behind the euro's leg lower,"
said Joe Manimbo, senior market analyst at Western Union
Business Solutions in Washington.
The single currency fell to $1.1150, its lowest since May
31. It held at $1.1158, down 0.45% on the day.
The euro dipped 0.22% to 120.64 yen after touching 120.53,
its lowest since Jan. 3.
Britain's pound slipped as Boris Johnson, who has promised
to lead Britain out of the European Union with or without deal
by the end of October, as expected will replace Theresa May as
prime minister.
The pound GBP=D3 was down 0.18% at $1.2456, within
striking distance of a 27-month low of $1.2382 reached last
week. It was 0.26% higher against euro EURGBP=D3 at 89.585
pence after hitting a six-month low of 90.51 last week.
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Currency bid prices at 10:16AM (1416 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1157 $1.1208 -0.46% -2.72% +1.1209 +1.1153
Dollar/Yen JPY= 108.1100 107.8600 +0.23% -1.95% +108.2800 +107.8400
Euro/Yen EURJPY= 120.63 120.90 -0.22% -4.43% +121.0800 +120.6500
Dollar/Swiss CHF= 0.9833 0.9819 +0.14% +0.19% +0.9852 +0.9819
Sterling/Dollar GBP= 1.2455 1.2474 -0.15% -2.37% +1.2481 +1.2419
Dollar/Canadian CAD= 1.3145 1.3118 +0.21% -3.61% +1.3164 +1.3116
Australian/Doll AUD= 0.7005 0.7034 -0.41% -0.62% +0.7036 +0.7003
ar
Euro/Swiss EURCHF= 1.0974 1.1006 -0.29% -2.49% +1.1019 +1.0973
Euro/Sterling EURGBP= 0.8957 0.8985 -0.31% -0.30% +0.9005 +0.8957
NZ NZD= 0.6708 0.6758 -0.74% -0.13% +0.6759 +0.6706
Dollar/Dollar
Dollar/Norway NOK= 8.6822 8.6059 +0.89% +0.50% +8.6865 +8.6054
Euro/Norway EURNOK= 9.6885 9.6493 +0.41% -2.20% +9.7012 +9.6464
Dollar/Sweden SEK= 9.4651 9.4124 +0.13% +5.59% +9.4716 +9.4120
Euro/Sweden EURSEK= 10.5638 10.5502 +0.13% +2.92% +10.5775 +10.5486
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