May 5, 2020 / 3:25 PM / 21 days ago

FOREX-Dollar gains after U.S. data; euro falls

    * Euro falls after German court ruling
    * Dollar gains after better-than-expected U.S. data
    * Trump steps up anti-China rhetoric
    * Graphic: World FX rates in 2019

 (Recasts, adds new comment, U.S. data, FX table, updates prices, changes byline, dateline; previous
    By Gertrude Chavez-Dreyfuss
    NEW YORK, May 5 (Reuters) - The dollar rose for a third straight session against most major currencies
on Tuesday, bolstered by U.S. services data last month that was better than market expectations.
    The greenback's gains were also supported after U.S. President Donald Trump stepped up verbal attacks
on China, raising fears of a new trade war. 
    Analysts said the dollar, as a safe-haven currency, also posted gains despite increased risk  appetite
as countries and some U.S. states started to reopen.
    "The dollar is going to benefit from any type of chaos and we are still in this kind of market, even
though we're seeing some risk-on sentiment with some U.S. states gradually re-opening," said Juan Perez,
currency analyst, at Tempus Inc. In Washington.
    The greenback's gains came at the expense of the euro, which weakened across the board after a German
constitutional court ruled that the Bundesbank must stop buying government bonds if the European Central
Bank cannot prove those purchases are needed.
    The decision did not apply to the ECB's latest pandemic-fighting program, a 750 billion-euro scheme to
prop up the economy, but the ruling unsettled financial markets, which had been calmed by aggressive ECB
asset purchases to prevent the coronavirus crisis leading to an economic meltdown.
    The dollar, meanwhile, edged higher after data showed a better-than-expected reading for the U.S.
services sector in April. The U.S. Institute for Supply Management's non-manufacturing index fell to 41.8
last month, from 52.5 in March, but the April level was higher than the consensus forecast of
    That data, however, was offset by a report showing U.S. business activity plumbed record lows in
April. Data firm IHS Markit said its flash U.S. Composite Output Index, which tracks the manufacturing and
services sectors, tumbled to 27.0 last month, the lowest since the series began in late 2009.
    Still, the dollar came out on top, and the dollar index was up 0.2% at 99.706.
    The euro, meanwhile, fell 0.5% to $1.0856 in the wake of the German court ruling, Refinitiv
data showed.
    The presence of a large long position in the single currency, which has intensified the selling
pressure, also hurt the euro.
    The dollar gained 0.5% versus the Swiss franc, another safe-haven currency, to 0.9708 franc,
but slipped 0.1% against the yen to 106.585 yen.
    Overall risk appetite was helped by gains in U.S. stocks and crude futures, which advanced 16%,
with Brent up around 10% as production fell and countries around the globe, including Italy,
Finland and several U.S. states, eased lockdown restrictions.
    As a result, commodity currencies rose, with the Australian dollar up 0.6% at 64.57 U.S.
cents. It also rose after the Reserve Bank of Australia left its targets for the cash rate and three-year
government bond yields unchanged at 0.25%. 
    Trading was light because of public holidays in Japan and China. The yuan rose to 7.1186 per
dollar in offshore trade, recovering from a six-week low of 7.1560 hit in the previous session, but well
below its range last month.
    Currency bid prices at 11:01AM (1501 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.0841        $1.0906     -0.60%         -3.27%      +1.0925     +1.0827
 Dollar/Yen       JPY=        106.6000       106.7300    -0.12%         -2.08%      +106.8900   +106.5200
 Euro/Yen         EURJPY=     115.59         116.38      -0.68%         -5.22%      +116.5600   +115.5500
 Dollar/Swiss     CHF=        0.9718         0.9649      +0.72%         +0.41%      +0.9725     +0.9647
 Sterling/Dollar  GBP=        1.2455         1.2442      +0.10%         -6.06%      +1.2483     +1.2422
 Dollar/Canadian  CAD=        1.4049         1.4083      -0.24%         +8.19%      +1.4094     +1.4007
 Australian/Doll  AUD=        0.6444         0.6426      +0.28%         -8.22%      +0.6476     +0.6418
 Euro/Swiss       EURCHF=     1.0537         1.0527      +0.09%         -2.88%      +1.0547     +1.0519
 Euro/Sterling    EURGBP=     0.8703         0.8764      -0.70%         +2.95%      +0.8767     +0.8692
 NZ               NZD=        0.6054         0.6046      +0.13%         -10.12%     +0.6076     +0.6034
 Dollar/Norway    NOK=        10.2672        10.3065     -0.38%         +16.96%     +10.3520    +10.2278
 Euro/Norway      EURNOK=     11.1332        11.2650     -1.17%         +13.17%     +11.2708    +11.1257
 Dollar/Sweden    SEK=        9.8250         9.8512      -0.91%         +5.12%      +9.9051     +9.7999
 Euro/Sweden      EURSEK=     10.6546        10.7520     -0.91%         +1.77%      +10.7781    +10.6530
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by
Dan Grebler)
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