August 9, 2018 / 3:06 PM / 2 months ago

FOREX-Dollar gains with focus on trade, strong economy; Russian rouble drops

    * Dollar supported by solid U.S. data
    * Sterling falls as no-deal Brexit concern grows
    * RBNZ unexpectedly commits to keep rates at record lows
    * Kiwi slides to lowest since March 2016

 (Updates prices, adds comment, FX table, changes byline,
dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Aug 9 (Reuters) - The dollar rose against most
major currencies on Thursday in  thin summer trading, as
investors bet global trade tensions and a robust U.S. economy
would continue to support the currency.
    The greenback has the upper hand in a trade war scenario
over emerging markets, analysts said, and tariffs may actually
narrow the U.S. trade deficit.
    Better-than-expected data on U.S. initial jobless claims and
generally rising producer prices also helped the dollar hold its
gains.
    "While firmer, the dollar kept to a narrow range with
traders awaiting U.S. inflation data on Friday to help shape its
short-run prospects," said Joe Manimbo, senior market analyst,
at Western Union Business Solutions in Washington.
    "Higher consumer prices, which are on the cards, would be
supportive of both the dollar and the Federal Reserve, raising
rates further this year."
    The dollar's gains, however, have been more pronounced
against emerging market currencies because an escalation in the
U.S.-China trade war would hit their export-oriented economies
harder.
    The dollar index, which tracks the dollar versus a group of
six currencies, was up 0.2 percent at 95.245. It rose to
a year-high of 95.652 on July 19 but has since struggled to
break much above the 95.5 level.
    Thursday's big mover was the New Zealand dollar, which fell
1.7 percent to US$0.6636, after earlier plunging to
U.S.$0.6634, its lowest since March 2016.
    The kiwi tumbled after the Reserve Bank of New Zealand on
Thursday unexpectedly committed to keeping interest rates at
record lows through to 2020 on disappointing economic activity,
a dovish turn that caught markets off-guard.
    In an apparent reflection of concern among investors about
an uptick in geopolitical tensions, including the U.S.-China
trade war and Brexit, the Japanese yen rose broadly before
trading flat against the dollar.     
    Global foreign exchange markets this summer have been
dominated by political angst from U.S. sanctions on Russia and
Turkey to rising tensions in the Middle East and in Europe.
    The Russian rouble retreated to its lowest
since November 2016 overnight, weakening beyond the
psychologically important 65 per dollar threshold, after
Washington said it would impose fresh sanctions on Moscow
.
    The euro, meanwhile, remained in the red against the dollar,
down 0.3 percent at $1.1581.
    Sterling on Thursday continued to slide, hitting $1.2879
following a drop to $1.2854 the previous day.
    The pound is weakening as investors ramp up bets Britain
will leave the European Union without an agreement with Brussels
on their future relationship.
    
    ========================================================
    Currency bid prices at 10:52AM (1452 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1580        $1.1610     -0.26%         -3.47%      +1.1619     +1.1576
 Dollar/Yen       JPY=        110.8800       110.9700    -0.08%         -1.59%      +111.1800   +110.7200
 Euro/Yen         EURJPY=     128.41         128.81      -0.31%         -5.01%      +129.0000   +128.4000
 Dollar/Swiss     CHF=        0.9900         0.9932      -0.32%         +1.61%      +0.9951     +0.9895
 Sterling/Dollar  GBP=        1.2882         1.2879      +0.02%         -4.66%      +1.2911     +1.2843
 Dollar/Canadian  CAD=        1.3028         1.3021      +0.05%         +3.61%      +1.3048     +1.3000
 Australian/Doll  AUD=        0.7405         0.7431      -0.35%         -5.08%      +0.7453     +0.7403
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1465         1.1532      -0.58%         -1.92%      +1.1536     +1.1463
 Euro/Sterling    EURGBP=     0.8986         0.9012      -0.29%         +1.16%      +0.9030     +0.8984
 NZ               NZD=        0.6633         0.6745      -1.66%         -6.39%      +0.6747     +0.6630
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.2559         8.2155      +0.49%         +0.59%      +8.2607     +8.2117
 Euro/Norway      EURNOK=     9.5616         9.5408      +0.22%         -2.91%      +9.5665     +9.5332
 Dollar/Sweden    SEK=        8.9750         8.9476      +0.01%         +9.43%      +8.9907     +8.9482
 Euro/Sweden      EURSEK=     10.3943        10.3930     +0.01%         +5.64%      +10.4195    +10.3843
 
 (Reporting by Gertrude Chavez-Dreyfuss
Additional reporting by Tom Finn in London
Editing by Alistair Bell)
  
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