February 12, 2018 / 4:08 PM / 2 months ago

FOREX-Dollar rally stalls as U.S. stocks rebound

    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 recovered a bit
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. But not all analysts were convinced that
Monday's decline would erase last week's gains. 
    “Markets are still in a tug of war between directional bias
for the dollar and the outlook for risk appetite. Obviously,
equity markets stabilized a bit into the North American session,
but the dollar is starting to stage a little bit of a comeback,”
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 0.2 percent at 90.291, erasing some of the
gains last week.
    European shares rallied on Monday after Asian markets had
found a semblance of calm.
    The euro was up 0.25 percent from Friday's close at
$1.2264, after earlier hitting a day's high of $1.2296. The euro
suffered its worst week since November 2016 last week and
remains almost three cents off its three year high of $1.2538
hit in January.
    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 0.28 percent from its last close to 108.50
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 10:39AM (1539 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2260        $1.2233     +0.22%         +0.00%      +1.2296     +1.2236
 Dollar/Yen       JPY=        108.5200       108.7800    -0.24%         +0.00%      +108.9400   +108.4500
 Euro/Yen         EURJPY=     133.06         133.30      -0.18%         +0.00%      +133.6300   +132.9000
 Dollar/Swiss     CHF=        0.9384         0.9399      -0.16%         +0.00%      +0.9402     +0.9365
 Sterling/Dollar  GBP=        1.3809         1.3835      -0.19%         +0.00%      +1.3875     +1.3798
 Dollar/Canadian  CAD=        1.2596         1.2576      +0.16%         +0.00%      +1.2610     +1.2557
 Australian/Doll  AUD=        0.7831         0.7812      +0.24%         +0.00%      +0.7845     +0.7803
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1507         1.1501      +0.05%         +0.00%      +1.1534     +1.1487
 Euro/Sterling    EURGBP=     0.8877         0.8860      +0.19%         +0.00%      +0.8881     +0.8843
 NZ Dollar/Dolar  NZD=        0.7239         0.7244      -0.07%         +0.00%      +0.7276     +0.7233
 Dollar/Norway    NOK=        7.9440         7.9643      -0.25%         +0.00%      +7.9825     +7.9312
 Euro/Norway      EURNOK=     9.7410         9.7561      -0.15%         +0.00%      +9.7802     +9.7386
 Dollar/Sweden    SEK=        8.0944         8.1013      +0.07%         +0.00%      +8.1113     +8.0608
 Euro/Sweden      EURSEK=     9.9252         9.9183      +0.07%         +0.00%      +9.9374     +9.9036
 
    
    
    

    
 (Reporting by Kate Duguid; Editing by Frances Kerry)
  
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