June 8, 2020 / 3:17 PM / a month ago

FOREX-Dollar inches up, commodity currencies higher as risk sentiment improves

    * Yen, Swiss franc rise on U.S. dollar profit-taking
    * New Zealand dollar rises to near 4-month high
    * Focus on U.S. Fed meeting, yield curve control this week
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Recasts, adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 8 (Reuters) - The U.S. dollar edged higher, while commodity currencies gained on
Monday, as risk appetite ramped up on optimism about some recovery from the coronavirus pandemic amid a
blockbuster U.S. jobs report last Friday.
    The safe-haven Japanese yen, meanwhile, rose against the dollar, reversing its downtrend in the midst
of broad risk-taking the last several days. Analysts said recent dollar buying against the yen, prompted
profit-taking in the greenback.
    "There has been this unwinding of negativity since the last week of May, particularly negative
U.S.-China bets, said Erik Bregar, head of FX strategy, at Exchange Bank of Canada in Toronto. 
    "There were expectations of U.S. retaliation because of what China has done to Hong Kong. But that
didn't happen. There was never a risk to the Phase 1 trade deal with China," he added.
    Commodity currencies such as the Australian, New Zealand, and Canadian dollar were well-bid on Monday.
The New Zealand dollar, for one, climbed to its highest in nearly four months after New Zealand said it
had stopped transmission of the coronavirus within the country.
    New Zealand Prime Minister Jacinda Arden said on Monday the country would lift all virus-containment
measures apart from border controls, making it one of the first countries to do so.
    In late morning trading, the dollar index was slightly up at 96.770 in choppy trading, after
having gained overnight.
    The dollar fell sharply against the yen, down 0.7% at 108.82. It also dropped 0.6% against
Swiss franc, another safe haven, to 0.9567.
    The euro was higher against the dollar despite data showing German industrial output plunged the most
on record in April as the virus pandemic forced companies in Europe's largest economy to scale back
production.
    The euro was last up 0.2% at $1.1306. It reached a three-month high of $1.1384 last week
after the European Central Bank announced it was expanding its stimulus program.
    "Euro/dollar may be due some consolidation after a very strong rally, but we suspect the 1.1230/40
area offers good support now before EUR/USD advances to the 1.15/16 area," ING strategists wrote in a note
to clients.
    The New Zealand dollar, meanwhile, rose 0.5% versus the greenback to US$0.6526, earlier hitting a high
of US$0.6540, its strongest since Jan. 29. The Australian dollar also rose to US$0.6970.
    Investors are now focused on the U.S. Federal Reserve policy meeting this week. The Fed will need to
balance signs that the economic fallout from the virus is past its worst with the evidence that the virus
itself is not yet under control.
    
    ========================================================
    Currency bid prices at 10:55AM (1455 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1298        $1.1284     +0.12%         +0.79%      +1.1319     +1.1269
 Dollar/Yen       JPY=        108.6600       109.5800    -0.84%         -0.18%      +109.6900   +108.5000
 Euro/Yen         EURJPY=     122.78         123.71      -0.75%         +0.68%      +124.1200   +122.5700
 Dollar/Swiss     CHF=        0.9564         0.9624      -0.62%         -1.18%      +0.9639     +0.9560
 Sterling/Dollar  GBP=        1.2694         1.2663      +0.24%         -4.25%      +1.2729     +1.2629
 Dollar/Canadian  CAD=        1.3385         1.3424      -0.29%         +3.10%      +1.3436     +1.3372
 Australian/Doll  AUD=        0.6985         0.6968      +0.24%         -0.51%      +0.7003     +0.6963
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0807         1.0860      -0.49%         -0.41%      +1.0889     +1.0804
 Euro/Sterling    EURGBP=     0.8898         0.8911      -0.15%         +5.25%      +0.8928     +0.8882
 NZ               NZD=        0.6531         0.6506      +0.38%         -3.04%      +0.6539     +0.6502
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.2713         9.2845      -0.14%         +5.61%      +9.3127     +9.2409
 Euro/Norway      EURNOK=     10.4774        10.5093     -0.30%         +6.50%      +10.5189    +10.4440
 Dollar/Sweden    SEK=        9.2095         9.1673      +0.40%         -1.48%      +9.2311     +9.1536
 Euro/Sweden      EURSEK=     10.4076        10.3663     +0.40%         -0.57%      +10.4257    +10.3557
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Elizabeth Howcroft in LONDON
Editing by Nick Zieminski)
  
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