By Caroline Valetkevitch
NEW YORK, Aug 5 (Reuters) - The U.S. dollar slipped against basket of currencies on Wednesday as investors' appetite for risk improved on strong corporate earnings and expectations of more stimulus measures for the pandemic-ravaged global economy.
U.S. and European investors piled into stocks on Wednesday as companies in both regions posted a batch of positive earnings reports.
The dollar, a safe-haven currency, typically weakens when investors grow more comfortable holding riskier assets.
On Wednesday, the U.S. Dollar Currency Index =USD, which measures the greenback's strength against six major currencies, was 0.536% lower at 92.652, just shy of a more than two year low of 92.593 touched last week.
"Clearly we have seen risk appetite rebound on global markets and sort of a return of the theme of a U.S. underperformance relative to world counterparts," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
U.S. stocks also have grown cheaper for overseas investors as the dollar has been pressured in recent weeks by worries about the U.S. economic slide during the coronavirus pandemic. The dollar fell further on Wednesday after the ADP National Employment Report, which showed U.S. private payrolls growth slowed sharply in July, suggesting a loss of momentum in the labor market.
"This morning's weak ADP data suggests we may see further weakness when non-farm payrolls land on Friday," he said. "That is weighing on the dollar's prospects relative to the other majors."
Euro zone business activity returned to modest growth in July as many curbs imposed to stop the spread of the coronavirus were lifted, while official estimates showed retail sales volumes rebounded in June.
Investors also are watching negotiations between the White House and congressional Democrats trying to reach a deal on a relief package by the end of this week. Treasury Secretary Steven Mnuchin said progress had been made.
The Australian dollar AUD=D3, which tends to rise when risk sentiment improves, was last up 0.88% at $0.7223 against the U.S. dollar.
Currency bid prices at 11:09AM (1509 GMT)
U.S. Close Previous Session
YTD Pct Change
Euro near 2-year highhttps://tmsnrt.rs/33uZUsO
Graphic: World FX rates in 2020https://tmsnrt.rs/2RBWI5E
(Reporting by Caroline Valetkevitch; Additional reporting by Olga Cotaga and Saqib Iqbal Ahmed; editing by John Stonestreet and David Gregorio)
((firstname.lastname@example.org; +1 646 223 6393; Reuters Messaging: email@example.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.