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Dollar rises against euro

Written by Business World, on 10th Aug 2020. Posted in World

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The dollar gained against some currencies on Monday, such as the euro and Swiss franc in generally choppy trading, as investors focused on fiscal stimulus in the United States and U.S.-China tensions ahead of key trade talks on Aug. 15.

The greenback rose to one-week highs against the euro and Swiss franc. The dollar index, however, traded little changed. It has recouped most of its losses in July when it fell 4%, after Friday's data calmed some fears about the U.S. labor market but still weakened on the week, for the seventh in a row.

After talks in Washington over the next round of fiscal stimulus broke down, U.S. President Donald Trump signed executive orders on Saturday, partially restoring enhanced unemployment payments to tens of millions of jobless Americans.

"We didn't get the deal done in Capitol Hill last week, but President Trump was able to sign those executive actions. So we're getting some stimulus, but not enough," said Ed Moya, senior market analyst at OANDA in New York.

"Right now, you'll probably going to see a little more consolidation this week of the big FX moves. But the longer-term outlook continues to be great on the euro, so you'll probably see people buying on dips," he added. In mid-morning trading, the euro fell 0.1% against the dollar to $1.1770, while the U.S. currency gained 0.2% versus the Swiss franc to 0.9143 franc.

The Swiss National Bank sight deposits rose in the week ending Aug. 7. A rise in sight deposits can indicate central bank intervention in foreign exchange markets to weaken the franc. Against the yen, however, the dollar slipped 0.1% to 105.84 yen.

Overall, the dollar index was flat to slightly higher at 93.43. Speculators increased their net short dollar positions in the latest week, according to weekly futures data on Friday. The dollar's strength at the end of last week was also due to escalating tensions between the United States and China, with the U.S. imposing sanctions on top Hong Kong and Chinese officials.

This continued to drive investors towards the safe-haven dollar on Monday. China imposed sanctions on 11 U.S. citizens, including legislators. Prominent democracy activist, Hong Kong media tycoon Jimmy Lai, was arrested on Monday under China's new national security law in the territory, while U.S. health chief Alex Azar visited Taiwan on Sunday - a trip condemned by China which claims the island as its own. Senior U.S. and Chinese officials will meet via teleconference on Saturday to review the implementation of their Phase 1 trade deal and likely air mutual grievances. (Reuters)

Source: www.businessworld.ie

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