February 12, 2018 / 8:04 PM / 5 days ago

FOREX-Dollar rally stalls as U.S. stocks extend gains

 (Updates prices, quotes)
    By Kate Duguid
    NEW YORK, Feb 12 (Reuters) - The dollar fell against the
euro on Monday following its best week against the single
currency in nearly 15 months, as U.S. stocks recouped some
losses from the dramatic selloff that saw the S&P 500's sharpest
decline in more than two years. 
    The selloff across asset classes forced investors betting
against the U.S. currency to unwind their positions. The dollar
also benefited as nervous investors bought the relative safety
of some U.S. assets.
    Speculators' net short U.S. dollar bets declined for the
first time in six weeks, according to calculations by Reuters
and Commodity Futures Trading Commission data released on
Friday.
    On Monday, the dollar's rally came to an end as the euro
staged a comeback. 
    "At the start of the year the dollar was broadly on the
defensive and most foreign currencies were doing fairly well and
those trends reemerged today. I think that's one of the reasons
the euro/dollar exchange rate is doing ok," said Nick
Bennenbroek, head of currency strategy at Wells Fargo Securities
in New York. 
    Even if the dollar has some room to extend last week's
rally, analysts agreed that it didn't change the overall
downward trend of the currency. 
    "The U.S. fundamentals are better and justify at least a
stabilization of the dollar, although I would call it a bear
market correction," said Mark McCormick, North American head of
FX strategy at TD Securities in Toronto.
    Appetite for risk-taking crept back into currency markets to
the detriment of the U.S. currency. It also helped
higher-yielding emerging market currencies as well as
commodity-linked currencies like the Australian and Canadian
dollars.
    The index that tracks the dollar against a basket of
currencies was down 0.28 percent at 90.189, erasing some of the
gains last week.
    The euro was up 0.25 percent from Friday's close at
$1.2284, after earlier hitting a day's high of $1.2296. 
    The moves in foreign exchange markets were far more muted
than in other asset classes last week, but analysts said
volatility had risen.
    Commerzbank said worries about U.S. inflation returning were
reflected in rising exchange rate volatilities options markets.
Analysts at the bank said that inflation concerns were unlikely
to disappear quickly, and that investors should get used to FX
volatility "remaining at higher levels for now or even rising
further."
    The dollar fell 0.09 percent from its last close to 108.69
yen, remaining above Friday's trough of 108.05 yen, its
lowest level since Sept. 11. The dollar last week fell nearly
1.3 percent against the yen.
    
    ========================================================
    Currency bid prices at 2:49PM (1949 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2284        $1.2233     +0.42%         +2.40%      +1.2296     +1.2236
 Dollar/Yen       JPY=        108.6800       108.7800    -0.09%         -3.54%      +108.9400   +108.4500
 Euro/Yen         EURJPY=     133.49         133.30      +0.14%         -1.25%      +133.6400   +132.9000
 Dollar/Swiss     CHF=        0.9385         0.9399      -0.15%         -3.67%      +0.9402     +0.9365
 Sterling/Dollar  GBP=        1.3826         1.3835      -0.07%         +2.32%      +1.3875     +1.3798
 Dollar/Canadian  CAD=        1.2608         1.2576      +0.25%         +0.25%      +1.2622     +1.2557
 Australian/Doll  AUD=        0.7842         0.7812      +0.38%         +0.53%      +0.7847     +0.7803
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1530         1.1501      +0.25%         -1.36%      +1.1536     +1.1487
 Euro/Sterling    EURGBP=     0.8882         0.8860      +0.25%         -0.01%      +0.8892     +0.8843
 NZ Dollar/Dolar  NZD=        0.7242         0.7244      -0.03%         +2.20%      +0.7276     +0.7233
 Dollar/Norway    NOK=        7.9188         7.9643      -0.57%         -3.51%      +7.9825     +7.9175
 Euro/Norway      EURNOK=     9.7288         9.7561      -0.28%         -1.22%      +9.7802     +9.7162
 Dollar/Sweden    SEK=        8.0697         8.1013      -0.05%         -1.61%      +8.1113     +8.0608
 Euro/Sweden      EURSEK=     9.9137         9.9183      -0.05%         +0.76%      +9.9374     +9.9036
 
    

    
 (Reporting by Kate Duguid; Editing by Frances Kerry and Cynthia
Osterman)
  
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