FOREX-Dollar falters against most majors on U.S. stimulus hopes

  • Reuters
  • Forex News
FOREX-Dollar falters against most majors on U.S. stimulus hopes
Credit: © Reuters.

* U.S. dollar posts worst quarterly loss in three years

* Mnuchin, Pelosi meet to discuss new stimulus bill

* Debate confirms uncertain election outlook, boosts dollar

* U.S. private employment rises in September

* U.S. GDP final estimate shows steep contraction

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds new analyst quote, stimulus comment from Sen. McConnell, updates prices,)

By Gertrude Chavez-Dreyfuss

NEW YORK, Sept 30 (Reuters) - The dollar fell against most currencies in choppy trading on Wednesday, as risk sentiment improved on renewed hopes for another stimulus package that could help ease the economic pain of the coronavirus-induced recession.

Overall, the dollar posted it worst quarter since September 2017, with a fall of about 3.5% as expectations for a swift recovery from the COVID-19 economic crash made investors exit safe havens and buy into riskier currencies.

The greenback slid against the Japanese yen and weakened versus currencies associated with higher risk appetite such as the Australian, New Zealand and Canadian dollars.

U.S. House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin met on Wednesday in a bid to broker a bipartisan deal on stalled COVID-19 relief legislation ahead of the Nov. 3 election. on Wall Street rose, while U.S. Treasury prices fell as risk aversion eased.

"Optimism abounds on the stimulus, whether that's foolhardy or not," said Amo Sahota, executive director at currency advisory firm Klarity FX in San Francisco.

"It's obvious that we do need something. I am not sure the bill will push through, but any positive news the market is kind of jumping on it," he added.

U.S. Senate Majority Leader Mitch McConnell late on Wednesday poured cold water though on some of that optimism. He said Republicans and Democrats are still very far apart on how much to spend on another coronavirus relief package. dollar index last traded little changed at 93.89 =USD . The index hit a two-month high last Friday.

"It's encouraging to hear the rhetoric, but until it is signed, sealed, and delivered, the market will be skeptical," said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

Tuesday's highly contentious debate between U.S. President Donald Trump and Democratic challenger Joe Biden boosted the dollar earlier, as it reinforced concerns that the outcome of the Nov. 3 presidential election could be contested.

Trump and Biden battled fiercely over the Republican incumbent's record on the coronavirus pandemic, health care and the economy in a chaotic and ill-tempered first debate marked by the current president's personal insults and repeated interruptions. greenback earlier was also boosted by quarter-end and month-end portfolio rebalancing, analysts said. Demand for dollars tends to rise at the end of quarters as portfolio rebalancing and fund transfers require currencies like the euro and sterling to be converted to dollars.

U.S. economic data was also for the most part dollar-supportive.

U.S. private employers stepped up hiring in September, with private payrolls increasing by 749,000 jobs this month, the ADP (NASDAQ: ADP ) National Employment Report showed on Wednesday. piece of data, however, showed U.S. gross domestic product plunged at a 31.4% annualized rate in the second quarter, the steepest drop since the government started keeping records in 1947. dollar fell 0.2% against the yen to 105.49 JPY=EBS .

The Australian dollar rose 0.5% against the greenback to US$0.7163 AUD=D3 . The New Zealand dollar gained 0.4% to US$0.6611 NZD=D3 . Against the Canadian dollar, the U.S. dollar fell 0.6% C$1.3312 CAD=D3 .

The euro EUR=EBS was down 0.2% against the dollar at $1.1717.

========================================================

Currency bid prices at 3:04PM (1904 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=

$1.1716

$1.1742

-0.22%

+4.51%

+1.1755

+1.1686 Dollar/Yen

JPY=

105.4800

105.6400

-0.15%

-3.10%

+105.8000 +105.4100 Euro/Yen

EURJPY=

123.59

124.05

-0.37%

+1.34%

+124.2400 +123.5600 Dollar/Swiss

CHF=

0.9209

0.9192

+0.18%

-4.85%

+0.9244

+0.9163 Sterling/Dollar GBP=

1.2903

1.2861

+0.33%

-2.69%

+1.2942

+1.2807 Dollar/Canadian CAD=

1.3313

1.3387

-0.55%

+2.52%

+1.3420

+1.3301 Australian/Doll AUD=

0.7163

0.7127

+0.51%

+2.02%

+0.7175

+0.7101 ar

Euro/Swiss

EURCHF=

1.0792

1.0796

-0.04%

-0.55%

+1.0816

+1.0763 Euro/Sterling

EURGBP=

0.9081

0.9127

-0.50%

+7.40%

+0.9157

+0.9067 NZ

NZD=

0.6609

0.6586

+0.35%

-1.89%

+0.6625

+0.6570 Dollar/Dollar

Dollar/Norway

NOK=

9.3435

9.4185

-0.80%

+6.44%

+9.4944

+9.3305 Euro/Norway

EURNOK=

10.9491

11.0617

-1.02%

+11.30%

+11.1141

+10.9369 Dollar/Sweden

SEK=

8.9571

8.9580

-0.32%

-4.18%

+9.0343

+8.9375 Euro/Sweden

EURSEK=

10.4970

10.5306

-0.32%

+0.27%

+10.5735

+10.4840

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