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FOREX-Dollar gains in surge in COVID cases, U.S. stimulus worries

Credit: REUTERS/ANTARA FOTO

The U.S. dollar advanced on Monday, rising for a second straight session, bolstered by safe haven bids amid surging coronavirus cases in Europe and the United States as well as a lack of progress on a U.S. stimulus package.

By Gertrude Chavez-Dreyfuss

NEW YORK, Oct 26 (Reuters) - The U.S. dollar advanced on Monday, rising for a second straight session, bolstered by safe haven bids amid surging coronavirus cases in Europe and the United States as well as a lack of progress on a U.S. stimulus package.

The United States, Russia and France set new daily records for new COVID-19 infections as a second wave swelled across parts of the Northern Hemisphere, forcing some countries to impose new curbs. Spain announced a new state of emergency and Italy has ordered restaurants and bars to shut by 6 p.m.

On the stimulus front, U.S. House Speaker Nancy Pelosi said on Sunday she expected a White House response on Monday to the latest relief plan, but there is little evidence a deal is close.

"With the S&P heading down, the market is getting nervous," said Amo Sahota, executive director at currency advisory firm Klarity FX in San Francisco.

"The danger is obviously if the case counts continue to rise as they have and we have to start additional restrictions, or curfews, or lockdowns in North America, although we have been told repeatedly by the government that they don't want to do that," he added.

Media reports that the Oxford/AstraZeneca vaccine has proved successful in elderly people and that staff at a major British hospital were told to prepare for it as early as next month were not enough to bolster sentiment.

An index tracking the U.S. dollar against a basket of six major currencies =USD was last up 0.3% at 93.052.

The euro EUR=EBS, which has the largest percentage share of the dollar index, fell 0.4% to $1.1811. It slipped earlier after the German Ifo business climate index fell for the first time in six months in October.

The dollar also rose 0.1% against the Japanese yen to 104.87JPY=EBS.

Speculators remain short the U.S. dollar, the latest data from the Commodity Futures Trading Commission showed, though the number of shorting contracts declined in the last couple of weeks. IMM/FX

Investors have also raised doubts about expectations of a Democratic sweep of the U.S. Congress.

"One of the permutations is a Democratic win, but no control of the Senate. Is it a complete blue sweep or is it something else?," said Klarity's Sahota. "If we don't get a blue sweep, then the stimulus won't be big enough."

The U.S. dollar rose 0.5% against the Chinese yuan in the offshore market to 6.703 CNH=EBS, in a sign of caution as the Chinese government began discussions on its next five-year plan.

The Australian dollar was last down 0.1% at 0.7137 AUD=D3, while the greenback rose 0.6% versusthe Canadian dollar to C$1.3203 CAD=D3.

The British pound also fell 0.1% against the dollar to $1.3023 GBP=D3.

Description

RIC

Last

U.S. Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

Euro/Dollar

EUR=EBS

$1.1814

$1.1862

-0.40%

+5.38%

+1.1859

+1.1804

Dollar/Yen

JPY=D3

104.8500

104.8000

+0.05%

-3.47%

+105.0500

+104.6750

Euro/Yen

EURJPY=

123.87

124.19

-0.26%

+1.57%

+124.2200

+123.7800

Dollar/Swiss

CHF=EBS

0.9073

0.9040

+0.38%

-6.23%

+0.9079

+0.9044

Sterling/Dollar

GBP=D3

1.3022

1.3039

-0.15%

-1.83%

+1.3074

+1.2993

Dollar/Canadian

CAD=D3

1.3200

1.3124

+0.57%

+1.60%

+1.3224

+1.3123

Aussie/Dollar

AUD=D3

0.7126

0.7137

-0.17%

+1.54%

+0.7146

+0.7103

Euro/Swiss

EURCHF=

1.0718

1.0724

-0.06%

-1.23%

+1.0728

+1.0708

Euro/Sterling

EURGBP=

0.9069

0.9095

-0.29%

+7.27%

+0.9106

+0.9042

NZ Dollar/Dollar

NZD=D3

0.6682

0.6692

-0.13%

-0.68%

+0.6697

+0.6670

Dollar/Norway

NOK=D3

9.2400

9.2205

+0.24%

+5.36%

+9.3205

+9.2290

Euro/Norway

EURNOK=

10.9187

10.9390

-0.19%

+10.99%

+11.0258

+10.9080

Dollar/Sweden

SEK=

8.7442

8.7472

-0.36%

-6.45%

+8.7870

+8.7324

Euro/Sweden

EURSEK=

10.3303

10.3677

-0.36%

-1.33%

+10.3955

+10.3230

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Marguerita Choy and Chizu Nomiyama)

((gertrude.chavez@thomsonreuters.com; 646-301-4124; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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