FOREX-Dollar weak vs. euro as month-end flows weigh

Reuters

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    * Euro logs 4th straight day of gains vs dollar
    * Sterling steady ahead of Brexit talks next week

 (Updates to U.S. afternoon)
    By Saqib Iqbal Ahmed
    NEW YORK, May 29 (Reuters) - The dollar edged lower against
the euro on Friday, hurt by month-end flows and as the common
currency continued to enjoy a boost from the European Union's
recently announced plan to prop up the bloc's coronavirus-hit
economies with a 750 billion-euro ($828 billion) recovery fund.
    The greenback was little moved after U.S. President Donald
Trump said on Friday he was directing his administration to
begin the process of eliminating special treatment for Hong
Kong, in response to China's plans to impose new security
legislation in the territory.  urn:newsml:reuters.com:*:nL1N2DB1ZX
    "I think traders were bracing for the possibility of new
tariffs or sanctions or a pullback on Phase 1 which of course
didn't happen," said John Doyle, vice president of dealing and
trading at Tempus Inc in Washington.
    The euro  EUR=  was 0.13% higher at $1.1091, its fourth
straight day of gains. The euro's rally this week has pushed it
over its 200-day moving average for the first time since late
March and lifted it about 1.7% for the week, its best weekly
gain in nine weeks.
    Much of the euro's move was driven by optimism generated by
the European Commission's stimulus plan announced earlier this
week, as well as investors' improved appetite for risk-taking as
global economies gradually move to reopen after
coronavirus-linked shutdowns, analysts said.
    Month-end adjustments to portfolio hedges, after a more than
3% rally in May for U.S. stocks, was also weighing on the
dollar, said Stephen Innes, chief global markets strategist at
AxiCorp.
    "The 3%-plus jump in equities this month suggests a
medium-sized USD sell program into month-end," said Innes.
    The euro was also helped by data that showed inflation
continued to slow on crashing oil prices but underlying price
growth held steady, a hopeful sign for European Central Bank
policymakers trying to stave off deflation.  urn:newsml:reuters.com:*:nL8N2DB2JQ
    The pound  GBP=  was about little-changed against the euro
and the dollar ahead of a new round of Brexit talks next week.

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GRAPHIC: World FX rates in 2020    https://tmsnrt.rs/2RBWI5E
GRAPHIC: Euro dollar exchange rate    https://tmsnrt.rs/2XG8Cjg
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 (Reporting by Saqib Iqbal Ahmed; additional reporting by Julien
Ponthus and Tom Westbroolk; editing by Jonathan Oatis and Daniel
Wallis)
 ((saqib.ahmed@thomsonreuters.com; @SaqibReports; +1 646 223
6054; Reuters Messaging:
saqib.ahmed.thomsonreuters.com@reuters.net))

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