July 21, 2020 / 2:43 PM / 15 days ago

FOREX-Euro scales fresh four-month peak vs dollar after EU virus deal

    * EU deal cheered, although largely priced in
    * Analysts say dollar set to struggle for now
    * Commodity currencies soar as risk sentiment improves
    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

 (Recasts, adds new comment, FX table, updates prices, changes
byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, July 21 (Reuters) - The euro on Tuesday climbed to
its highest against the U.S. dollar in more than four months
after European Union countries struck an agreement on a massive
stimulus plan to revive their coronavirus-battered economies.
    An upturn in sentiment following the EU deal lifted the
Australian dollar to a 15-month high, the New Zealand currency
to a six-month peak and the Canadian dollar to its strongest
level in six weeks. These are commodity currencies that thrive
when risk appetite rises.
   The EU deal - a compromise on concerns that thrifty northern
states had about handouts for more their more profligate
neighbors - was hailed as an important signal of unity by
Europe's leaders and a foundation for economic recovery.

    "There was all this anticipation for this rescue package,
which was almost guaranteed that it will pass and when it did,
it made everybody happy," said Juan Perez, currency trader at
Tempus Inc in Washington.
    "And this kind of symbolizes the fact that the European
Union is going to work together to achieve fiscal integration
for this rescue package. And it came to fruition," he added.
    Encouraging results from several COVID-19 vaccine trials
also boosted market sentiment and drove a rally in global stock
markets.
    In mid-morning trading, the euro rose 0.1% to $1.1457
, after earlier hitting $1.1470, the highest since
early March. Gains were tempered as investors had already priced
in an EU agreement.
    Analysts said there was little new information in the final
deal to spur the euro much higher immediately, with the
breakdown between grants and loans already known.
    "From now on, it is primarily the recovery of the real
economy and the development of (coronavirus) infections that
will determine how the euro will perform going forward," said
Commerzbank analyst Esther Reichelt said.
    The dollar was down 0.1% against a basket of other
currencies at 95.592.
    ING analysts said they are looking for "more gains to $1.20
later this year" as dollar weakness kicks in because the
recovery fund agreement is significant enough "not to prompt
investors to exit their long euro positions," particularly
against the dollar, where the outlook has darkened for the rest
of the year.
    The Australian dollar was last up 1.2% at US$0.7099, also
lifted after the central bank offered few surprises in minutes
from last month's meeting.
    In a speech, Governor Philip Lowe said while he would prefer
a cheaper Aussie dollar, its 27% recovery from March lows was
supported by fundamentals.
    The New Zealand dollar rose 0.8% to US$0.6623.
    The Canadian dollar strengthened 0.6% to 1.3447
Canadian dollars per U.S. dollar..
    The dollar fell 0.2% against the yen to 107.01.
    
    ========================================================
    Currency bid prices at 10:16AM (1416 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1465        $1.1444     +0.18%         +2.27%      +1.1469     +1.1424
 Dollar/Yen       JPY=        106.9300       107.2400    -0.29%         -1.77%      +107.3600   +106.9500
 Euro/Yen         EURJPY=     122.63         122.78      -0.12%         +0.56%      +123.0200   +122.4800
 Dollar/Swiss     CHF=        0.9378         0.9387      -0.10%         -3.10%      +0.9399     +0.9368
 Sterling/Dollar  GBP=        1.2720         1.2660      +0.47%         -4.07%      +1.2722     +1.2651
 Dollar/Canadian  CAD=        1.3452         1.3533      -0.60%         +3.59%      +1.3537     +1.3438
 Australian/Doll  AUD=        0.7100         0.7013      +1.24%         +1.13%      +0.7108     +0.7011
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0753         1.0745      +0.07%         -0.91%      +1.0758     +1.0723
 Euro/Sterling    EURGBP=     0.9012         0.9035      -0.25%         +6.60%      +0.9050     +0.9002
 NZ               NZD=        0.6627         0.6574      +0.81%         -1.60%      +0.6630     +0.6560
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.1365         9.2276      -0.99%         +4.08%      +9.2325     +9.1343
 Euro/Norway      EURNOK=     10.4771        10.5664     -0.85%         +6.50%      +10.5796    +10.4658
 Dollar/Sweden    SEK=        8.9136         8.9506      -0.47%         -4.64%      +8.9808     +8.9166
 Euro/Sweden      EURSEK=     10.2214        10.2692     -0.47%         -2.37%      +10.2813    +10.2244
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tommy Wilkes in London; Editing by Steve Orlofsky)
  
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