March 23, 2020 / 2:50 PM / in 6 days

FOREX-Dollar drops after Fed unveils unprecedented measures to lend, backstop debt

 (Adds quote, updates prices, new byline, changes dateline,
previous LONDON)
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

    By Karen Brettell
    NEW YORK, March 23 (Reuters) - The dollar dropped on Monday
after the U.S. Federal Reserve took unprecedented steps to
backstop a range of debt in an attempt to offset the "severe
disruptions" to the economy caused by the coronavirus outbreak.
    The steps include establishment of new programs that will
lend against student loans, credit card loans, and U.S.
government backed-loans to small businesses, as well as new
programs to buy bonds of larger employers and make loans to
them.
    Existing purchases of U.S. Treasury and mortgage-backed
securities will be expanded as much as needed "to support smooth
market functioning and effective transmission of monetary policy
to broader financial conditions and the economy."
    “There's no doubting that the Fed is doing everything within
its power to see the economy through this period of unbelievable
turmoil,” said Craig Erlam, senior market analyst at OANDA
Europe.
    Investors are now waiting on the U.S. government to pass
stimulus to support the economy.
    "I think the one thing we really need to see is more fiscal
ammunition coming to the fore,” said Mazen Issa, senior currency
strategist at TD Securities in New York. “You've got to think
about those that are asked to be socially distant and stay home
from work and not earn a paycheck and they're taking their time
to make them whole. They need to speed it up."
    Senate Democrats objected to a $1 trillion-plus stimulus
bill on Sunday as being overly weighted toward corporate
interests at the expense of healthcare workers, hospitals and
state and local governments.
    The dollar index against a basket of peers was last
101.79, down 0.7% on the day.
    The dollar had gained earlier before the Fed action as
stocks plunged, raising concerns that the multiple central bank
actions so far to ease liquidity across markets have not been
effective.
    The euro was last up 0.98% against the greenback at
$1.0799.
    The U.S. currency's earlier rise was also fuelled by a
turnaround in dollar positions among hedge funds to a net short
from an overall long bet, according to latest positioning data.
That raised speculation that the dollar's rally could be partly
explained by short-covering by traders.
    
    
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    Currency bid prices at 10:38AM (1438 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.0799        $1.0694     +0.98%         -3.67%      +1.0806     +1.0638
 Dollar/Yen       JPY=        110.7500       110.8000    -0.05%         +1.74%      +111.2400   +109.6800
 Euro/Yen         EURJPY=     119.60         118.52      +0.91%         -1.93%      +119.6300   +117.7600
 Dollar/Swiss     CHF=        0.9803         0.9865      -0.63%         +1.30%      +0.9899     +0.9797
 Sterling/Dollar  GBP=        1.1644         1.1641      +0.03%         -12.18%     +1.1739     +1.1507
 Dollar/Canadian  CAD=        1.4448         1.4362      +0.60%         +11.26%     +1.4490     +1.4337
 Australian/Doll  AUD=        0.5819         0.5798      +0.36%         -17.12%     +0.5844     +0.5702
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0590         1.0543      +0.45%         -2.41%      +1.0595     +1.0531
 Euro/Sterling    EURGBP=     0.9273         0.9171      +1.11%         +9.69%      +0.9299     +0.9138
 NZ               NZD=        0.5713         0.5708      +0.09%         -15.19%     +0.5736     +0.5596
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        11.2925        11.7527     -3.92%         +28.63%     +11.9231    +11.1991
 Euro/Norway      EURNOK=     12.1942        12.6660     -3.72%         +23.95%     +12.7423    +12.0460
 Dollar/Sweden    SEK=        10.2279        10.3812     -0.50%         +9.42%      +10.4793    +10.2144
 Euro/Sweden      EURSEK=     11.0490        11.1040     -0.50%         +5.54%      +11.1791    +11.0511
   
    

    
 (Additional reporting by Saikat Chatterjee in London
Editing by Marguerita Choy)
  
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