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Europe, Forex

Dollar hits to five-week peak on debt, budget deal

* Euro sags below $1.12 to lowest since late May * IMF raises U.S. growth view, lowers global growth outlook * Sterling slips as Johnson succeeds May as UK prime minister * GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh (New throughout, updates market action) By Richard Leong NEW YORK, July 23 (Reuters) – The dollar rose on Tuesday to near a five-week high against a basket of currencies after President Donald Trump and U.S. lawmakers reached a two-year deal lifting government borrowing limits to cover spending. The U.S. Treasury now can ramp up short-term borrowing to rebuild a cash pile that has fallen to about $195 billion from $423 billion in late April, Morgan Stanley analysts said. An increase in U.S. borrowing would pare money in the banking system, which is seen as supportive for the greenback. “Excess reserves should decline, lending (dollar) support,” Morgan Stanley strategists Hans Redeker, Gek Teng Khoo and Sheena Shah wrote in a research note. The dollar’s appeal got a boost after the International Monetary Fund raised its forecast on U.S. growth in 2019 while lowering its global growth outlook. Support also came from a Bloomberg report that U.S. negotiators will head to China on Monday for face-to-face trade talks. In late U.S. trading, an index that tracks the greenback versus the euro, yen, sterling and three other currencies was up 0.47% at 97.716. It touched 97.718, its highest level in about five weeks. The euro weakened broadly as investors geared up for news of fresh stimulus from the European Central Bank. Money markets have trimmed bets on a 10-basis-point deposit rate cut, but analysts expect dovish guidance and possibly more generous terms for planned multi-year loans. “The market has doubts in the ECB keeping its limited powder dry this week, the driving force behind the euro’s leg lower,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. The single currency fell to $1.1148, its lowest since May 31. It held at $1.1150, down 0.52% on the day. The euro dipped 0.16% to 120.72 yen after touching 120.49, its lowest since Jan. 3. Britain’s pound slipped on news Boris Johnson, who promised to exit the European Union with or without deal by the end of October, will replace Theresa May as prime minister. The pound was down 0.31% at $1.244, within striking distance of a 27-month low of $1.2382 reached last week. It was 0.23% higher against euro at 89.615 pence after hitting a six-month low of 90.51 last week. ======================================================== Currency bid prices at 1516 EDT (1916 GMT): Description RIC Last U.S. Pct YTD Pct High Bid Low Bid Close Change Change Previous Session Euro/Dollar EUR= $1.1148 $1.1208 -0.54% -2.80% +1.1209 +1.1148 Dollar/Yen JPY= 108.2600 107.8600 +0.37% -1.81% +108.2800 +107.8400 Euro/Yen EURJPY= 120.70 120.90 -0.17% -4.37% +121.0800 +120.5000 Dollar/Swiss CHF= 0.9858 0.9819 +0.40% +0.45% +0.9859 +0.9819 Sterling/Dollar GBP= 1.2437 1.2474 -0.30% -2.51% +1.2481 +1.2419 Dollar/Canadian CAD= 1.3138 1.3118 +0.15% -3.66% +1.3164 +1.3116 Australian/Doll AUD= 0.7002 0.7034 -0.45% -0.67% +0.7036 +0.6997 ar Euro/Swiss EURCHF= 1.0992 1.1006 -0.13% -2.33% +1.1019 +1.0972 Euro/Sterling EURGBP= 0.8962 0.8985 -0.26% -0.24% +0.9005 +0.8954 NZ NZD= 0.6704 0.6758 -0.80% -0.19% +0.6759 +0.6704 Dollar/Dollar Dollar/Norway NOK= 8.6819 8.6059 +0.88% +0.50% +8.6950 +8.6054 Euro/Norway EURNOK= 9.6783 9.6493 +0.30% -2.30% +9.7012 +9.6464 Dollar/Sweden SEK= 9.4666 9.4124 +0.06% +5.62% +9.4770 +9.4120 Euro/Sweden EURSEK= 10.5570 10.5502 +0.06% +2.85% +10.5775 +10.5486 (Reporting by Saikat Chatterjee in LONDON; editing by Catherine Evans and David Gregorio)


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