FOREX NEWS

FOREX-Dollar hovers near two-month high amid economic, political risks | – Kitco NEWS


(Adds graphic)

* Dollar off two-month high after best week in almost six
months

* Big net short dollar position points to chance of further
rise

* Euro hampered by concerns about infections

* Turkish lira at record low as rate hike boost fades

* Graphic: World FX rates in 2020 By Ritvik Carvalho
LONDON, Sept 28 (Reuters) – The dollar hovered near a
two-month peak against a basket of currencies on Monday as
doubts about economic recovery persisted before a barrage of
economic data and political developments in the United States.
A rebound in U.S. stocks on Friday has helped curb the ascent
of the dollar, considered a safe haven, but signs of slowdown in
the nascent recovery from the pandemic and political
uncertainties have kept investors on guard.
The dollar index slipped to 94.21 . It reached a
two-month high of 94.745 last week and posted its biggest weekly
rise since early April. Against the yen, the dollar was more
subdued at 105.36 yen .

The pound jumped to $1.2896 on hopes Britain could
secure a Brexit trade deal with the EU.
The euro rose 0.3% to $1.1661 after dropping to
$1.16125 on Friday, its lowest in two months.

“Rising global and notably European risk aversion continue
to be clearly U.S. dollar positive, and notably investors
entered this period of questioning the risk/reflation/recovery
theme stretched on dollar shorts,” said Christin Tuxen, head of
research at Danske Bank.

Friday’s data on U.S. currency futures positions also
suggested the dollar had room to rise further, with speculators
holding a big net short position in the currency which they
could move to cover if the dollar moves higher. U.S. Commodity Futures Trading Commission’s broad measure of
dollar positioning showed speculators’ net short position rose
to $33.989 billion last week , up from $31.524
billion the week before and near its highest in almost a decade. The flip side of that was a large net long position in the
euro, which inched up last week to $27.922 billion .
“We think euro/dollar should find good long-term demand
below the 1.1600 area, but really require some better news on
the global recovery – effective lockdowns, vaccines, new
stimulus – before the euro/dollar rally fully resumes,” ING said
in a note to clients.
Investor attention may now turn to the first U.S.
presidential debate on Tuesday.

“Few people will be trying to bet on the election outcome.
At least they will wait until tomorrow’s TV debate,” said
Kyosuke Suzuki, director of forex at Societe Generale.
Meanwhile, worries are growing that the economic recovery is
slowing as many stimulus programmes have expired, curbing
consumer spending.
This week will bring more data on the health of the world’s
biggest economy, including consumer confidence on Tuesday, a
manufacturing survey and consumer data on Thursday, and jobs
data on Friday.
Elsewhere, the Turkish lira briefly dropped 1.6% to a record
low of 7.8000 per dollar .
The lira had enjoyed a rare bounce after an interest rate
increase late last week, but the gains faded amid scepticism
about how it would filter through into market rates. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Dollar hovers near 2-month high Dollar shorts near 9-year high ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Ritvik Carvalho; additional reporting by Hideyuki
Sano in Tokyo; Editing by Kirsten Donovan and Tomasz Janowski)

Messaging: ritvik.carvalho.thomsonreuters@reuters.net))

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