FOREX-Dollar rally loses steam as investors eye stimulus talks in Washington

    * Graphic: World FX rates in 2020

 (Updates prices, comments, changes byline, dateline, previous
    By Caroline Valetkevitch
    NEW YORK, Aug 4 (Reuters) - The U.S. dollar was little
changed against a basket of currencies on Tuesday, as recent
gains driven by dollar bears taking profits ran out of steam and
investors looked to Washington for direction as talks on the
next round of coronavirus relief aid continued.
    After its worst month in a decade in July, the greenback
started August on a firm note as some investors trimmed their
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 recent days in discussions over a
fifth major coronavirus aid bill to help the economy, but they
remain apart on a range of issues.
    Expectations that the U.S. economy's recovery would lag its
peers have weighed on the dollar.
    "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.
    There are still a lot of questions over the U.S. economy's
recovery, and the next big 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.
    But giving some support to the dollar for now is "a little
bit of profit-taking. The dollar is so grossly oversold. ... You
had this enormous amount of one-way price action," he said. 
    The dollar index, which measures the currency against a
basket of currencies, was about flat at 93.539.
    The euro - which gained 5% at the dollar's expense in July -
was last down 0.04% at $1.1756.
    The Aussie dollar was up 0.31% after the Australian
central bank held policy steady, as expected.
    Australia's central bank predicted that the economic
recovery would be uneven. The country's second biggest state,
Victoria, is under lockdown to fight a resurgence of the virus.

    Despite a slowdown in new U.S. virus cases and encouraging
factory data, investors are reserving judgement on whether a
U.S. economy with 30 million people out of work can really lead
the world's recovery.
    Top White House officials and Democratic leaders in the U.S.
Congress were due to try again on Tuesday to narrow gaping
differences over a fifth major coronavirus-aid bill to help the
economy. Days of closed-door negotiations have so far yielded
few results, participants say.
    Currency bid prices at 10:55AM (1455 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1756        $1.1761     -0.04%         +4.87%      +1.1806     +1.1722
 Dollar/Yen       JPY=        105.8300       105.9400    -0.10%         -2.77%      +106.1900   +105.7400
 Euro/Yen         EURJPY=     124.44         124.61      -0.14%         +2.03%      +125.0100   +124.2700
 Dollar/Swiss     CHF=        0.9159         0.9177      -0.20%         -5.36%      +0.9191     +0.9143
 Sterling/Dollar  GBP=        1.3046         1.3072      -0.20%         -1.61%      +1.3107     +1.2982
 Dollar/Canadian  CAD=        1.3368         1.3389      -0.16%         +2.93%      +1.3420     +1.3360
 Australian/Doll  AUD=        0.7145         0.7123      +0.31%         +1.75%      +0.7153     +0.7106
 Euro/Swiss       EURCHF=     1.0769         1.0793      -0.22%         -0.76%      +1.0810     +1.0740
 Euro/Sterling    EURGBP=     0.9009         0.8994      +0.17%         +6.56%      +0.9040     +0.8991
 NZ               NZD=        0.6608         0.6610      -0.03%         -1.90%      +0.6624     +0.6590
 Dollar/Norway    NOK=        9.1180         9.1306      -0.14%         +3.85%      +9.1671     +9.0887
 Euro/Norway      EURNOK=     10.7206        10.7410     -0.19%         +8.97%      +10.7700    +10.7128
 Dollar/Sweden    SEK=        8.7507         8.7394      +0.01%         -6.38%      +8.7850     +8.7184
 Euro/Sweden      EURSEK=     10.2880        10.2867     +0.01%         -1.72%      +10.3044    +10.2744

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