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FOREX-Dollar rally fizzles as investors eye stimulus talks in Washington
Published at 04/08/2020 at 20:12

* Dollar index on pace to snap 2-day rising streak

* Top Senate Democrat says COVID-19 relief talks 'moving in the right direction'

(New throughout, updates prices, market activity and comments to U.S. afternoon trading)

By Caroline Valetkevitch and Saqib Iqbal Ahmed

NEW YORK, Aug 4 (Reuters) - The U.S. dollar edged lower in choppy trade against a basket of currencies on Tuesday, choking off a recent rally fueled by dollar bears taking profits on short positions, while investors watched talks in Washington on the next round of coronavirus relief.

After its biggest monthly decline in a decade in July, the greenback started August on a firmer note as some investors trimmed short positions.

But the immediate outlook for the dollar remains tied partly to relief aid talks in Washington and the economic impact of new virus cases in the United States.

The White House and Democratic congressional leaders have reported some progress in discussions over a fifth major coronavirus aid bill, but they remain apart on a range of issues.

The U.S. Dollar Currency Index , which measures the greenback's strength against six major currencies, was 0.16% lower after rising 0.6% over the previous two sessions.

"While a consolidation or a modest corrective rebound was inevitable after the sharp fall last month, market sentiment towards the dollar remains negative due to dominating concerns about the scale of the coronavirus pandemic in the U.S. and its devastating impact on the economy," Piotr Matys, senior emerging markets FX Strategist at Rabobank, said in a note.

Despite a slowdown in new U.S. virus cases and encouraging factory data, investors remained concerned about the U.S. economy. The next big U.S. data points will be weekly jobless claims and the July U.S. employment report this week, said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.

The Aussie dollar was up 0.44% after the Australian central bank held policy steady.

========================================================

Currency bid prices at 2:59PM (1859 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1780 $1.1761 +0.16% +0.00% +1.1806 +1.1722

Dollar/Yen JPY= 105.7700 105.9400 -0.16% +0.00% +106.1900 +105.7200

Euro/Yen EURJPY= 124.61 124.61 +0.00% +0.00% +125.0100 +124.2700

Dollar/Swiss CHF= 0.9145 0.9177 -0.35% +0.00% +0.9191 +0.9142

Sterling/Dollar GBP= 1.3054 1.3072 -0.14% +0.00% +1.3107 +1.2982

Dollar/Canadian CAD= 1.3347 1.3389 -0.31% +0.00% +1.3420 +1.3346

Australian/Doll AUD= 0.7152 0.7123 +0.44% +0.00% +0.7158 +0.7106

ar

Euro/Swiss EURCHF= 1.0774 1.0793 -0.18% +0.00% +1.0810 +1.0740

Euro/Sterling EURGBP= 0.9024 0.8994 +0.33% +0.00% +0.9040 +0.8991

NZ NZD= 0.6608 0.6610 -0.03% +0.00% +0.6624 +0.6590

Dollar/Dollar

Dollar/Norway NOK= 9.1076 9.1306 -0.25% +0.00% +9.1671 +9.0887

Euro/Norway EURNOK= 10.7316 10.7410 -0.09% +0.00% +10.7700 +10.7128

Dollar/Sweden SEK= 8.7400 8.7394 +0.10% +0.00% +8.7850 +8.7184

Euro/Sweden EURSEK= 10.2971 10.2867 +0.10% +0.00% +10.3044 +10.2744

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC: World FX rates in 2020

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Reporting by Caroline Valetkevitch; additional reporting by Iain Withers in London and Tom Westbrook in Singapore; editing by Barbara Lewis, Gareth Jones, Jonathan Oatis and David Gregorio)

((caroline.valetkevitch@thomsonreuters.com; +1 646 223 6393; Reuters Messaging: caroline.valetkevitch.thomsonreuters.com@reuters.net))