April 28, 2020 / 2:02 PM / a month ago

FOREX-Dollar drops as stocks gain, month-end approaches

 (Adds details, updates prices; changes byline, dateline;
previous LONDON)
    By Karen Brettell
    NEW YORK, April 28 (Reuters) - The dollar dropped against a
basket of other currencies for the second day on Tuesday as
rising stocks reflected improving risk appetite, and as
investors rebalanced portfolios for month-end.
    Stock investors were cheered by better than expected
corporate earnings and economic optimism after several countries
and U.S. states laid out plans to reopen businesses that were
shut to stem the spread of the novel coronavirus.
    Month-end rebalancing is also negative for the greenback
with the U.S. dollar likely to be sold against the euro,
sterling, the Japanese yen and the Australian dollar, according
to Mark McCormick, global head of FX strategy at TD Securities
in Toronto.
    These flows, in combination with a number of central bank
meetings this week, make it difficult to read too much into
market moves, he said.
    “We wouldn't draw too many conclusions about the state of
the currency market over the next few sessions given the
mingling of policy and technical drivers,” McCormick said.
    The dollar index fell 0.42% to 99.64. It has risen
from 99.00 at the end of March.
    The Swedish crown jumped against the dollar and euro on
Tuesday after the central bank held interest rates steady and
maintained stimulus measures designed to support an economy
battered by the coronavirus pandemic.
    The greenback fell 0.92% to 9.911 crowns, after
earlier getting as low as 9.853, the lowest since March 30.
    With Sweden facing its worst downturn since World War Two,
investors had watched closely for any sign the Riksbank would
push rates back below zero after it became the first central
bank to ditch a negative interest rate policy late last year.
    But the Riksbank left its benchmark rate at 0%, as expected,
with its governor saying a rate cut would not solve Sweden's
economic problems.
    "It's hard not to see this as a bit hawkish - you'd think
that if they didn't cut rates now, when would they cut?" said
Morten Lund, FX strategist at Nordea, adding that he expected
rates to remain steady this year and next.
    Traders are next focused on a U.S. Federal Reserve meeting
that will end on Wednesday and a European Central Bank (ECB)
meeting on Thursday.
    The Fed has led the global monetary policy response to the
coronavirus pandemic by cutting interest rates to zero and
aggressively buying bonds and corporate credit - a program it
extended on Monday to include municipal debt of smaller U.S.

    Currency bid prices at 9:34AM (1334 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.0861        $1.0828     +0.30%         -3.11%      +1.0888     +1.0811
 Dollar/Yen       JPY=        106.6500       107.2200    -0.53%         -2.03%      +107.3400   +106.5700
 Euro/Yen         EURJPY=     115.86         116.14      -0.24%         -4.99%      +116.2600   +115.8600
 Dollar/Swiss     CHF=        0.9727         0.9752      -0.26%         +0.51%      +0.9799     +0.9722
 Sterling/Dollar  GBP=        1.2461         1.2428      +0.27%         -6.02%      +1.2517     +1.2405
 Dollar/Canadian  CAD=        1.3949         1.4029      -0.57%         +7.42%      +1.4072     +1.3935
 Australian/Doll  AUD=        0.6491         0.6464      +0.42%         -7.55%      +0.6514     +0.6435
 Euro/Swiss       EURCHF=     1.0568         1.0564      +0.04%         -2.62%      +1.0612     +1.0556
 Euro/Sterling    EURGBP=     0.8715         0.8709      +0.07%         +3.09%      +0.8723     +0.8690
 NZ               NZD=        0.6057         0.6045      +0.20%         -10.08%     +0.6072     +0.5993
 Dollar/Norway    NOK=        10.3719        10.5017     -1.24%         +18.15%     +10.5533    +10.3494
 Euro/Norway      EURNOK=     11.2700        11.3775     -0.94%         +14.56%     +11.4139    +11.2620
 Dollar/Sweden    SEK=        9.8821         10.0031     -0.92%         +5.72%      +10.0440    +9.8582
 Euro/Sweden      EURSEK=     10.7340        10.8332     -0.92%         +2.53%      +10.8587    +10.7240

 (Additional reporting by Tom Wilson in London)
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