* EUR gains, dollar and yen sold as U.S. stimulus prospects
grow
* Asia moves slight as traders wait for progress in
Washington
* AUD, NZD lag gains as easing expectations drag
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Oct 21 (Reuters) - The dollar was pinned near a
one-week low on Wednesday as investors optimistic about the
prospects for a pre-election U.S. stimulus package sought
riskier currencies.
The White House and Democrats have moved closer to
agreement on a new coronavirus relief package as President
Donald Trump said he was willing to accept a large aid bill
despite opposition from his own Republican Party.
"I want to do it even bigger than the Democrats," Trump said
in an interview with Fox News on Tuesday. Democrat and House
Speaker Nancy Pelosi, when asked whether an agreement could be
reached next week, told reporters: "I hope so. That's the plan."
That pushed the dollar index down 0.4% to a one-week
low of 92.991. It sat just above that level in Asia trade.
Stimulus is seen as a short-term weight on the dollar
because the spending would support the U.S. economy and improves
market sentiment, driving investors into riskier assets.
The euro led gains to hit a one-month high of $1.1841
and held at $1.1828 in Asia. U.S. bonds were sold and the
safe-haven yen was also on the back foot, though it
recovered from a one-week low to sit at 105.49 per dollar on
Wednesday.
The usually risk-sensitive Antipodean currencies lagged
broad gains on the dollar, weighed by the prospect of negative
rates in New Zealand and monetary easing in Australia. Brexit
worries also kept a lid on the pound.
"All eyes are on whether a U.S. stimulus bill is agreed
upon," Kim Mundy, currency analyst at the Commonwealth Bank of
Australia in Sydney, said in a note.
"If U.S. policymakers manage to agree on fiscal deal, the
dollar can edge lower especially against commodity sensitive
currencies," she said.
"But without a more aggressive U.S. fiscal thrust, the U.S.
economic recovery is at risk and the dollar is vulnerable to a
renewed bout of strength in the short-term."
The Chinese yuan, meanwhile, is flying high on
China's world-leading economic recovery. It crept higher in
offshore trade ahead of the onshore open at 0130 GMT and sits
just shy of a more than two-year peak made on Tuesday.
Later on Wednesday, preliminary Australian retail sales
figures are due. At 0730 GMT, European Central Bank President
Christine Lagarde and chief economist Philip Lane host a broad
strategy review event in Frankfurt.
The U.S. Federal Reserve releases its "Beige Book" economic
survey at 1800 GMT.
========================================================
Currency bid prices at 8:03AM (0003 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1830 $1.1821 +0.08% +5.53% +1.1831 +1.1823
Dollar/Yen 105.4500 105.4700 +0.00% -2.90% +105.5200 +105.4650
Euro/Yen 124.74 124.71 +0.02% +2.29% +124.8300 +124.7000
Dollar/Swiss 0.9068 0.9071 -0.02% -6.28% +0.9070 +0.9067
Sterling/Dollar 1.2956 1.2947 +0.05% -2.33% +1.2957 +1.2952
Dollar/Canadian 1.3119 1.3129 -0.05% +1.02% +1.3128 +1.3118
Aussie/Dollar 0.7051 0.7048 +0.04% +0.49% +0.7058 +0.7047
NZ 0.6581 0.6580 +0.00% -2.21% +0.6583 +0.6577
Dollar/Dollar All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook; Editing by Sam Holmes)
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October 21, 2020 at 07:44AM
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Stimulus hopes press dollar to one-week low - Reuters
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