Views Article – Sharenet Wealth

Europe, Forex

Euro nears 2-year high; Aussie, Kiwi up as risk appetite grows

* Markets largely shrug off U.S.-China tensions * U.S. coronavirus deaths continue to rise * Graphic: World FX rates in 2020 (Updates to midafternoon, changes byline) By Chuck Mikolajczak NEW YORK, July 22 (Reuters) – The euro strengthened to its highest in nearly two years against the dollar, while commodity currencies gained as risk-on moves continue in the wake of a fiscal stimulus deal reached by European Union leaders on Tuesday. Currency traders largely shrugged off U.S.-China tensions, although risk appetite in currency markets briefly diminished for about two hours, after the United States told China to close its consulate in Houston amid spying accusations, the latest example of worsening relations between the two countries. The mood remained largely optimistic, however, following the EU’s agreement on a 750 billion-euro recovery fund to share the debts incurred during the coronavirus crisis, with the euro up for a fourth straight day against the greenback. “This is part of global reflation and maybe the multiyear bull market in the dollar has come to an end,” said Axel Merk, president and chief investment officer at Merk Investments in Palo Alto, California. In afternoon trading, the euro was last up 0.37% at $1.1569, after hitting $1.1601, the highest since October 2018. After gaining on the U.S.-China headlines, the dollar index resumed falling and was down 0.2% at 94.939. The index fell to a low of 94.827, its weakest since March. “The dollar is weak and the key reason for that is real interest rates in the U.S. are low and are promised to go lower,” said Merk. The U.S. Federal Reserve is scheduled to hold a two-day policy meeting next week, in which it is expected to keep interest rates near zero as it seeks to support an economy battered by coronavirus lockdowns. The United States reported more than 1,000 deaths from COVID-19 on Tuesday, according to a Reuters tally, the first time since June 10 the nation has surpassed that milestone. California was close to passing New York in total infections. The Australian dollar was up 0.2% at US$0.71425 after earlier hitting a fresh 15-month high, while the New Zealand dollar was up 0.3% at US$0.6664, touching a six-month peak earlier in the session. A flare-up of coronavirus cases and the reintroduction of lockdown measures in Australia’s second-largest state had little impact on the currency, even after reports that the latest virus outbreak will cut the country’s third-quarter GDP growth by 0.75 percentage point. The Chinese offshore yuan, which weakened past 7 per dollar on U.S.-China headlines, had recouped that level by afternoon trading, at 7.0119. Sterling lost ground versus the dollar and euro, driven by a report in the Financial Times that the British government has abandoned hopes of clinching a free-trade deal with the United States by the end of the year and concerns the Brexit transition period will expire without a deal between Britain and the EU. ======================================================== Currency bid prices at 3:17PM (1917 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1570 $1.1526 +0.38% +3.21% +1.1600 +1.1508 Dollar/Yen JPY= 107.2100 106.7600 +0.42% -1.52% +107.2800 +106.7200 Euro/Yen EURJPY= 124.06 123.10 +0.78% +1.73% +124.2800 +123.0800 Dollar/Swiss CHF= 0.9294 0.9331 -0.40% -3.97% +0.9351 +0.9287 Sterling/Dollar GBP= 1.2739 1.2728 +0.09% -3.92% +1.2743 +1.2645 Dollar/Canadian CAD= 1.3413 1.3457 -0.33% +3.29% +1.3483 +1.3400 Australian/Doll AUD= 0.7141 0.7127 +0.20% +1.71% +0.7182 +0.7113 ar Euro/Swiss EURCHF= 1.0752 1.0755 -0.03% -0.90% +1.0794 +1.0743 Euro/Sterling EURGBP= 0.9080 0.9047 +0.36% +7.40% +0.9137 +0.9051 NZ NZD= 0.6662 0.6644 +0.27% -1.10% +0.6689 +0.6634 Dollar/Dollar Dollar/Norway NOK= 9.1484 9.1027 +0.50% +4.21% +9.1811 +9.0804 Euro/Norway EURNOK= 10.5860 10.5033 +0.79% +7.58% +10.5945 +10.4832 Dollar/Sweden SEK= 8.8686 8.8761 +0.25% -5.12% +8.9114 +8.8374 Euro/Sweden EURSEK= 10.2635 10.2380 +0.25% -1.96% +10.2755 +10.2240 (Reporting by Chuck Mikolajczak; editing by Jonathan Oatis)

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