FOREX-Dollar rises but posts biggest monthly drop in a decade

Reuters

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    * Dollar index up slightly after recent weakness
    * Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

 (Adds quotes, latest prices)
    By Caroline Valetkevitch
    NEW YORK, July 31 (Reuters) - The dollar rose against a
basket of currencies on Friday as investors covered shorts and
took profits after the biggest monthly decline in the currency
in a decade.
    The dollar index  =USD  was down 4.1% for July, its biggest
monthly percentage fall since September 2010, with most of the
drop coming in the last 10 days as new coronavirus cases surged
across several U.S. states and some recent data pointed to an
economic recovery losing steam.  urn:newsml:reuters.com:*:nL2N2F10ZB
    On Friday, the dollar mostly held gains after data showed
U.S. inflation-adjusted consumer spending has pulled out of
April's deep hole but remains below its pre-pandemic level, and
the currency strengthened as the session wore on.
    After sliding as low as 92.539 earlier, the lowest since May
2018, the dollar index was last up 0.6% at 93.377.
    "You had the dollar enter into a very serious decline over
the month," said Boris Schlossberg, managing director of FX
strategy at BK Asset Management in New York. "Interest rates are
going down, and that makes the dollar much less attractive as a
yield play, but (also) the market is starting to become aware of
the political risk of the dollar." 
    "Today, we're just seeing a little bit of short covering,
and a little bit of risk off always creates flows into the
dollar."
    On Thursday, confidence in the dollar was undermined after
U.S. President Donald Trump raised the possibility of delaying
the Nov. 3 presidential election.  urn:newsml:reuters.com:*:nL2N2F111T
    
    The euro was at $1.1786  EUR=EBS , down 0.51% on the day. 
    The currency was little moved by data showing the euro zone
economy recorded its deepest contraction on record in the second
quarter while the bloc's inflation unexpectedly ticked up in
July.  urn:newsml:reuters.com:*:nL5N2F234K
    The euro traded below $1.10 as recently as May, but after
European Union leaders agreed this month to a 750 billion euro
economic recovery fund - while also taking on debt jointly in a
major boost to regional cooperation - many investors have warmed
to the currency again.
    On a trade-weighted basis, the euro is at its highest since
2014  EUREER=ECBF .
    The dollar's drop this month has created space for a rebound
in currencies hit hard in March, when investors rushed for the
safety of the greenback as panic over the coronavirus gripped
markets.
    Against the Japanese yen, the dollar earlier hit a
4-1/2-month low but last stood at 105.77  JPY=EBS , up 1%.
    The British pound was at $1.3097  GBP=D3 , up 0.03% on the
day.
    ========================================================
    Currency bid prices at 3:30PM (1930 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1786        $1.1846     -0.51%         +5.14%      +1.1908     +1.1762
 Dollar/Yen       JPY=        105.7700       104.7200    +1.00%         -2.84%      +106.0500   +104.1900
 Euro/Yen         EURJPY=     124.69         124.06      +0.51%         +2.25%      +125.2000   +123.8500
 Dollar/Swiss     CHF=        0.9142         0.9087      +0.61%         -5.54%      +0.9144     +0.9057
 Sterling/Dollar  GBP=        1.3097         1.3093      +0.03%         -1.22%      +1.3169     +1.3081
 Dollar/Canadian  CAD=        1.3385         1.3422      -0.28%         +3.06%      +1.3439     +1.3371
 Australian/Doll  AUD=        0.7142         0.7193      -0.71%         +1.71%      +0.7227     +0.7134
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0776         1.0768      +0.07%         -0.72%      +1.0798     +1.0747
 Euro/Sterling    EURGBP=     0.8998         0.9045      -0.52%         +6.43%      +0.9063     +0.8981
 NZ               NZD=        0.6629         0.6698      -1.03%         -1.59%      +0.6715     +0.6624
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.0927         9.0746      +0.20%         +3.58%      +9.1289     +9.0278
 Euro/Norway      EURNOK=     10.7170        10.7520     -0.33%         +8.94%      +10.7825    +10.7103
 Dollar/Sweden    SEK=        8.7723         8.6902      +0.40%         -6.15%      +8.7957     +8.6431
 Euro/Sweden      EURSEK=     10.3415        10.2998     +0.40%         -1.22%      +10.3505    +10.2740
 

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U.S. dollar index    https://tmsnrt.rs/2CVqUXv
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 (Reporting by Caroline Valetkevitch; Additional reporting by
Thomas Wilkes in London and Hideyuki Sano in Tokyo; Editing by
Jan Harvey, David Holmes, Jonathan Oatis and Richard Chang)
 ((caroline.valetkevitch@tr.com))

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