June 22, 2020 / 7:26 PM / 23 days ago

FOREX-Dollar dips, Aussie gains as traders bet on pandemic recovery

    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates prices, adds detail and investor comment, previous NEW
    By Noel Randewich
    June 22 (Reuters) - The U.S. dollar weakened and higher-risk
currencies including the Australian dollar jumped on Monday as
investors focused on the prospect for an eventual economic
recovery from the coronavirus pandemic.
    Traders bought riskier currencies even after signs of
setbacks in the battle to contain the coronavirus. 
    The World Health Organization (WHO) reported a record
increase in global novel coronavirus cases on Sunday, with North
America and South America showing the largest rises.

    On Friday, Apple Inc said it was temporarily
shutting some stores again in Florida, Arizona, South Carolina,
and North Carolina due to fresh outbreaks in the U.S. states.

    "The market is looking ahead to the second half of the year,
when it expects the recovery to begin in earnest," said Joe
Manimbo, senior market analyst at Western Union Business
Solutions, in Washington. "Conviction is really lacklustre, so
sentiment can certainly change on a dime, but for now the market
is taking the view of the glass half full."
    Strong economic data has raised hopes the economy will
bounce back quickly from business shutdowns to stem the spread
of the virus. 
    Francesco Pesole, FX strategist at ING, said investors were
watching the extent to which new cases led to tighter lockdown
    "If markets start to make the connection that more cases
will automatically imply new lockdowns then obviously it will
get much more sensitive to any new peak in terms of second
wave," Pesole said.
    The dollar dipped 0.64% against a basket of currencies
 to 97.06.
    The euro gained 0.72% versus the dollar to 1.1256,
rising off recent two-and-a-half-week lows.
    On Friday, EU leaders agreed urgent action was needed to
haul their economies from the deepest recession since World War
Two, but made no progress on a massive stimulus plan that has
divided them for weeks.
    Riskier currencies outperformed, with the Australian dollar
 rallying 1.21% to $0.6915 against the greenback.
    Emboldening buyers of the Australian dollar, Reserve Bank of
Australia (RBA) Governor Philip Lowe said the currency's recent
rise was not a problem and the impact of the pandemic would not
be as bad as feared.
    A broad gauge of dollar positioning on Friday
showed speculators increased their short bets against the
greenback to the most since May 2018, at $16.27 billion.

    Currency bid prices at 2:57 pm ET (1857 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1256        $1.1175     +0.72%         +0.41%      +1.1269     +1.1169
 Dollar/Yen       JPY=        106.9300       106.8700    +0.06%         -1.76%      +107.0000   +106.7800
 Euro/Yen         EURJPY=     120.38         119.43      +0.80%         -1.29%      +120.4100   +119.3200
 Dollar/Swiss     CHF=        0.9474         0.9523      -0.51%         -2.11%      +0.9528     +0.9466
 Sterling/Dollar  GBP=        1.2472         1.2356      +0.94%         -5.94%      +1.2477     +1.2336
 Dollar/Canadian  CAD=        1.3528         1.3603      -0.55%         +4.17%      +1.3630     +1.3518
 Australian/Doll  AUD=        0.6915         0.6832      +1.21%         -1.51%      +0.6922     +0.6806
 Euro/Swiss       EURCHF=     1.0668         1.0640      +0.26%         -1.70%      +1.0674     +1.0640
 Euro/Sterling    EURGBP=     0.9023         0.9049      -0.29%         +6.73%      +0.9065     +0.9021
 NZ               NZD=        0.6483         0.6405      +1.22%         -3.76%      +0.6494     +0.6372
 Dollar/Norway    NOK=        9.5902         9.6405      -0.52%         +9.25%      +9.7137     +9.5754
 Euro/Norway      EURNOK=     10.7957        10.7733     +0.21%         +9.74%      +10.8665    +10.7339
 Dollar/Sweden    SEK=        9.3637         9.4673      -0.51%         +0.17%      +9.4718     +9.3554
 Euro/Sweden      EURSEK=     10.5427        10.5970     -0.51%         +0.70%      +10.5975    +10.5340
 (Reporting by Noel Randewich in Oakland, Additional reporting
by Karen Brettell in New York and Elizabeth Howcroft in London;
Editing by Sonya Hepinstall)
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