February 9, 2018 / 4:49 PM / in 6 months

FOREX-Dollar poised for best week in 15 months amid market turmoil

    * Euro on course for worst week since November 2016
    * Dollar backs off four-month lows vs yen as safe-haven bids
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    * Strategists expect dollar weakness to resume despite rally
    * Currency market volatility rises less than stocks, bonds

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong and Kate Duguid
    NEW YORK, Feb 9 (Reuters) - The dollar rose on Friday,
putting it on track for its strongest week against a basket of
currencies in nearly 15 months as some traders piled into the
greenback in a week of tremendous swings felt in stock and bond
markets around the world.
    The U.S. currency stemmed its protracted decline this week.
Some traders have bought it to close out their bets on its
weakness, while others favored the dollar in a safe-haven move
over higher-returning but riskier currencies, analysts said.
    “Overall, it’s just a highly volatile environment where the
idiosyncratic things that drive (the market) - fundamentals,
economic data – are taking second stage … Everything is becoming
much more correlated in a very volatile environment,” said Boris
Schlossberg, managing director of FX strategy at BK Asset
Management in New York.
    The dramatic moves in equities and bonds this week were
stoked by concerns about signs of inflation amid an improving
global backdrop and speculation whether the Federal Reserve and
other major central banks would act quicker to raise interest
rates.
    Equity and bond market volatility has surged this
week. While foreign exchange markets have
been calmer, the turbulence was enough to upend some popular
trades, analysts said. 
    Betting on the dollar weakening against the euro has been
one of them, with an expanding euro zone economy stoking
expectations the European Central Bank will shrink its balance
sheet sooner than expected.
    The single currency was last down 0.08 percent at $1.2235,
marking a 1.7 percent drop this week which would be its steeply
weekly decline since November 2016, Reuters data showed.
    The greenback stabilized versus safe-haven currencies after
Thursday's decline. 
    It rebounded from a four-month low to 108.66 yen, down 0.07
percent. It was up 0.47 percent at $0.9402 Swiss franc
.
    Against a basket of six major currencies, the greenback was
up 0.21 percent at 90.420. On the week, the dollar index
has risen 1.41 percent for its best week in almost 15 months.
    The dollar's advance was supported by some stabilization in
U.S. stock prices, a day after heavy selling sank the Dow
and S&P 500 into correction territory.
    The bond market also calmed from its wild moves earlier this
week. Benchmark 10-year Treasury yield was 1 basis
point lower on the day at 2.838 percent, which was below a
four-year peak of 2.885 percent on Monday.
    The dollar also received support after Congress and U.S.
President Donald Trump approved a federal budget plan that ended
an overnight federal shutdown.
========================================================
    Currency bid prices at 11:33AM (1633 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2235        $1.2245     -0.08%         +0.00%      +1.2287     +1.2228
 Dollar/Yen       JPY=        108.6600       108.7400    -0.07%         +0.00%      +109.3000   +108.5100
 Euro/Yen         EURJPY=     132.97         133.16      -0.14%         +0.00%      +134.1600   +132.8300
 Dollar/Swiss     CHF=        0.9402         0.9358      +0.47%         +0.00%      +0.9408     +0.9350
 Sterling/Dollar  GBP=        1.3810         1.3911      -0.73%         +0.00%      +1.3987     +1.3787
 Dollar/Canadian  CAD=        1.2606         1.2602      +0.03%         +0.00%      +1.2683     +1.2560
 Australian/Doll  AUD=        0.7811         0.7779      +0.41%         +0.00%      +0.7830     +0.7760
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1506         1.1465      +0.36%         +0.00%      +1.1528     +1.1459
 Euro/Sterling    EURGBP=     0.8858         0.8802      +0.64%         +0.00%      +0.8879     +0.8778
 NZ Dollar/Dolar  NZD=        0.7253         0.7215      +0.53%         +0.00%      +0.7258     +0.7200
 Dollar/Norway    NOK=        7.9717         7.9226      +0.62%         +0.00%      +8.0566     +7.9022
 Euro/Norway      EURNOK=     9.7547         9.7083      +0.48%         +0.00%      +9.8773     +9.6922
 Dollar/Sweden    SEK=        8.0957         8.1171      -0.37%         +0.00%      +8.1564     +8.0884
 Euro/Sweden      EURSEK=     9.9060         9.9430      -0.37%         +0.00%      +10.0018    +9.9062
 
    
    
        

    
 (Additional reporting by Tommy Wilkes in London; Editing by
Peter Graff and Meredith Mazzilli)
  
 
 
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