NEW YORK (Reuters) - The dollar fell on Thursday in choppy trading as investors rebalanced portfolios for month-end and after U.S. stock markets pared losses, but remained lower on the day.
FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration/File Photo
Month-end rebalancing is seen as negative for the greenback with investors expected to sell the dollar against other major currencies.
The dollar had briefly gained earlier on Thursday as stocks slipped and after the European Central Bank disappointed some investors who had expected that it would expand bond purchases to junk bonds.
It was “a combination of weaker risk and short-term reaction to the ECB announcement that there would be no QE expansion,” said Vassili Serebriakov, an FX strategist at UBS in New York.
The euro was last up 0.18% at $1.0883, the highest since April 16, after dropping to $1.0834 after the ECB meeting.
The dollar index against a basket of currencies fell 0.22% to 99.27.
The greenback has weakened from a more than three-year peak of 102.99 in late March as global central banks launched massive stimulus measures to protect economies from the coronavirus outbreak.
Improving risk appetite, if it continues, is likely to dent the dollar even further. Investors are getting more optimistic that economies globally may be closer to reopening as the number of cases of the novel coronavirus decline.
“If we are seeing a bit of a rebound in risk, and I would say the last week or so has been quite encouraging on that front, then that would suggest that this would take some of the upward pressure off the dollar,” said Craig Erlam, senior market analyst at OANDA in London.
The Federal Reserve on Wednesday kept interest rates near zero and promised to expand emergency programs as needed to help the battered economy.
On Thursday the Fed also said it was expanding the scope and eligibility of its soon-to-launch “Main Street Lending Program” to reach a greater range of small- and medium-sized businesses seeking emergency financing to weather the disruption caused by the coronavirus pandemic.
The cross-currency basis swap for swapping yen LIBOR for dollar LIBOR turned negative on Thursday for the first time in a month, indicating strong overseas demand for dollars for month-end.
Reporting by Karen Brettell; editing by Jonathan Oatis
https://www.reuters.com/article/global-forex/forex-dollar-slips-in-choppy-trading-for-month-end-idUSL1N2CI18O
2020-04-30 15:00:00Z
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