* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Eimi Yamamitsu
TOKYO, Aug 19 (Reuters) - The dollar struggled to recoup
heavy overnight losses on Wednesday after it slipped to 27-month
low the previous session as uncertainties about an economic
recovery and the U.S. fiscal stimulus package weighed.
The dollar hit fresh lows against most major currencies
overnight as the ongoing effects of the Federal Reserve's
stimulus programmes weakened the greenback broadly and lifted
U.S. stock indexes to record highs.
The dollar =USD last sat at 92.179 against a basket of
currencies.
The euro EUR=EBS changed hands at $1.1949, having
strengthened to its highest level since May 2018 in the previous
session.
Sterling edged above Tuesday's eight-month high of $1.3241,
last quoted at $1.3255.
“There is a strong momentum for investors to want to sell
the dollar,” said Juntaro Morimoto, an analyst at Sony Financial
Holdings, pointing that the greenback has been declining since
last month.
Although the dollar often functions as a safe-haven
investment in times of crisis, it has fallen since the Federal
Reserve's intervention into financial markets to maintain
liquidity in the midst of the COVID-19 pandemic.
The Fed's programmes have pushed risk assets to all-time
highs and reduced demand for safe-havens, even as economic data
has painted a bleak picture of the U.S. recovery.
In commodities market, a softening dollar kept gold
elevated, with spot gold XAU= last trading at $2,002.1 per
ounce.
An agreement over a new round of federal stimulus
spending remained elusive, although U.S. House of
Representatives Speaker Nancy Pelosi said on Tuesday that
Democrats in Congress are willing to cut their coronavirus
relief bill in half to get an agreement on new legislation with
the White House and Republicans. Providing additional headwind for the dollar, President
Donald Trump on Tuesday said a big shift to mail-in voting in
the November presidential election could cause so many problems
officials might have to re-do the vote. On the data front, Japan's official data on exports fell
19.2% in July from a year earlier, beating economists' forecast
of 21% decrease, while the country's core machinery orders fell
7.6% in June from the previous month. Against the yen JPY= , the dollar last sat at 105.17 yen.
Investors await the release later on Wednesday of the
minutes from the July 28-29 FOMC meeting, with speculation the
Fed will adopt an average inflation target, which would seek to
push inflation above 2% for some time.
The risk-sensitive Australian dollar AUD=D3 traded near
$0.7255, while the kiwi NZD=D3 last bought $0.6611.