July 31, 2020 / 2:58 PM / in 14 days

FOREX-Dollar inches up but set for biggest monthly drop in a decade

    * Dollar index up slightly after recent weakness
    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

 (Adds details, latest prices, changes byline, dateline,
previous LONDON)
    By Caroline Valetkevitch
    NEW YORK, July 31 (Reuters) - The dollar was up slightly on
Friday but on track for its biggest monthly drop in a decade as
concerns that an increase in U.S. coronavirus cases will slow
the rebound in the economic recovery.
    Confidence in the dollar was undermined further after U.S.
President Donald Trump on Thursday raised the possibility of
delaying the Nov. 3 presidential election.
    The dollar mostly held gains after data on Friday showed
U.S. inflation-adjusted consumer spending has pulled out of
April's deep hole but remains below its pre-pandemic level.
    On Thursday, advance gross domestic product (GDP) data
showed contraction of an annualised 32.9% in the second quarter,
the quickest pace since the Great Depression. 
    The dollar index slid as low as 92.539 earlier, the
lowest since May 2018, but has recovered to trade up 0.32% at
93.039. 
    It has fallen more than 4% in July, which would be the
biggest monthly drop since September 2010, with most of the drop
coming in the last 10 days as new cases of coronavirus surged
across several U.S. states and some recent data pointed to an
economic recovery losing steam.
    "Absent a risk-off episode, it looks as if the dollar wants
to just pull back a bit, and the euro has been prominent," said
Quincy Krosby, chief market strategist at Prudential Financial
in Newark, New Jersey.
    
    The euro was at $1.1833, down 0.11% on the day. 
    The currency was little moved by data showing the euro zone
economy recorded its deepest contraction on record in the second
quarter while the bloc's inflation unexpectedly ticked up in
July.
    The euro traded below $1.10 as recently as May, but after
European Union leaders agreed this month to a 750 billion euro
economic recovery fund - while also taking on debt jointly in a
major boost to regional cooperation - many investors have warmed
to the currency again.
    On a trade-weighted basis, the euro is at its highest since
2014.
    The dollar's drop this month has created space for a rebound
in currencies hit hard in March, when investors rushed for the
safety of the greenback as panic over the coronavirus gripped
markets. 
    Against the yen, the dollar earlier hit a 4-1/2-month low
but last stood at 105.71, up 0.95%.
    The British pound surged to $1.3156, up 0.48% on
the day.
    ========================================================
    Currency bid prices at 10:35AM (1435 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1833        $1.1846     -0.11%         +5.56%      +1.1908     +1.1803
 Dollar/Yen       JPY=        105.7100       104.7200    +0.95%         -2.89%      +105.7700   +104.1900
 Euro/Yen         EURJPY=     125.09         124.06      +0.83%         +2.57%      +125.2000   +123.8500
 Dollar/Swiss     CHF=        0.9112         0.9087      +0.28%         -5.86%      +0.9129     +0.9057
 Sterling/Dollar  GBP=        1.3156         1.3093      +0.48%         -0.78%      +1.3169     +1.3081
 Dollar/Canadian  CAD=        1.3427         1.3422      +0.04%         +3.40%      +1.3439     +1.3404
 Australian/Doll  AUD=        0.7169         0.7193      -0.33%         +2.11%      +0.7227     +0.7162
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0785         1.0768      +0.16%         -0.62%      +1.0798     +1.0755
 Euro/Sterling    EURGBP=     0.8994         0.9045      -0.56%         +6.39%      +0.9063     +0.8981
 NZ               NZD=        0.6659         0.6698      -0.58%         -1.14%      +0.6715     +0.6651
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.0685         9.0746      -0.07%         +3.30%      +9.0871     +9.0278
 Euro/Norway      EURNOK=     10.7335        10.7520     -0.17%         +9.10%      +10.7825    +10.7140
 Dollar/Sweden    SEK=        8.7079         8.6902      +0.04%         -6.84%      +8.7230     +8.6431
 Euro/Sweden      EURSEK=     10.3044        10.2998     +0.04%         -1.57%      +10.3155    +10.2740
 

    
 (Reporting by Caroline Valetkevitch; Additional reporting by
Thomas Wilkes in London and Hideyuki Sano in Tokyo; Editing by
Jan Harvey, David Holmes and Jonathan Oatis)
  
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