NEW YORK (Reuters) - The U.S. dollar fell to an 11-week low against a basket of other currencies on Wednesday, on optimism that the worst of the economic downturn stemming from the global spread of the coronavirus is over.
FILE PHOTO: A woman counts U.S. dollar banknotes as Lebanese pounds are pictured in the background at a currency exchange shop in Beirut, Lebanon April 3, 2020. REUTERS/Mohamed Azakir
The improving risk appetite has reduced demand for the greenback, which benefits from safe haven buying when markets are volatile and investors are reluctant to take risk.
“Momentum seems to be running the table right now. We think the broad pullback in the U.S. dollar presents an attractive buying opportunity, but recognize there may still be room for additional weakness in the near-term,” analysts at Wells Fargo said in a report on Wednesday.
The dollar index against a basket of major currencies =USD fell 0.22% to 97.37, after earlier dropping as low as 97.28, the lowest since March 12.
U.S. data on Wednesday showed that U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen, though the overall economy’s recovery from the COVID-19 pandemic will be slow.
U.S. services industry activity also pushed off an 11-year low in May, though businesses appeared in no rush to rehire workers as they reopen.
The greenback gained 0.03% against the Japanese yen JPY= to 108.69 yen, after earlier reaching 108.84 yen, the highest since April 9.
The Australian dollar AUD=, which has been one of the best performers from the increase in risk appetite, rose 0.23% to $0.6910, after earlier reaching $0.6983, the highest since Jan. 3.
The euro EUR= rose 0.40% to $1.1214, after getting as high as $1.1231, the highest since March 16.
Investors are focused on whether the European Central Bank will increase the size of its 750 billion euro ($669 billion) Pandemic Emergency Purchase Programme (PEPP) when it meets on Thursday.
Overnight euro implied volatility gauges jumped to 12%, their highest in one month, suggesting traders were preparing for moves bigger than usual in the common currency. EURONO=FN
Data on Wednesday showed that euro zone businesses suffered another devastating contraction in activity in May and while there are signs the worst is over, it could be months before there is a return to growth.
Sterling rose on Wednesday to a one-month high though Brexit risks weighed on the currency.
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Currency bid prices at 10:09AM (1409 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1214 $1.1169 +0.40% +0.04% +1.1231 +1.1168
Dollar/Yen JPY= 108.6900 108.6600 +0.03% -0.16% +108.8400 +108.4300
Euro/Yen EURJPY= 121.88 121.37 +0.42% -0.06% +122.1200 +121.2800
Dollar/Swiss CHF= 0.9629 0.9621 +0.08% -0.51% +0.9647 +0.9608
Sterling/Dollar GBP= 1.2575 1.2549 +0.21% -5.16% +1.2611 +1.2547
Dollar/Canadian CAD= 1.3510 1.3516 -0.04% +4.04% +1.3571 +1.3480
Australian/Doll AUD= 0.6910 0.6894 +0.23% -1.58% +0.6983 +0.6857
ar
Euro/Swiss EURCHF= 1.0800 1.0747 +0.49% -0.48% +1.0810 +1.0746
Euro/Sterling EURGBP= 0.8917 0.8897 +0.22% +5.48% +0.8928 +0.8879
NZ NZD= 0.6410 0.6368 +0.66% -4.84% +0.6430 +0.6361
Dollar/Dollar
Dollar/Norway NOK= 9.4969 9.5438 -0.49% +8.18% +9.5714 +9.4612
Euro/Norway EURNOK= 10.6490 10.6624 -0.13% +8.25% +10.7066 +10.6079
Dollar/Sweden SEK= 9.3140 9.3277 +0.28% -0.36% +9.3583 +9.2637
Euro/Sweden EURSEK= 10.4479 10.4191 +0.28% -0.20% +10.4679 +10.3943
Reporting by Karen Brettell; Editing by Steve Orlofsky
https://in.reuters.com/article/global-forex/forex-dollar-index-dips-to-11-week-low-as-risk-appetite-improves-idINL1N2DG183
2020-06-03 14:39:00Z
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