for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Company News

FOREX-Euro falls to two-months low as COVID-19 angst boosts dollar

* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

* French business activity unexpectedly slows

* German recovery slower than expected

* Dollar holds gains against

* Response to second wave of virus rattles investors

TOKYO, Sept 23 (Reuters) - The euro fell to a two-month low on Wednesday as positive U.S. economic data and concern about a second wave of coronavirus infections met tepid European indicators and pushed the U.S. dollar higher.

The dollar edged up to $1.1671 per euro, its highest since July 27, after data showed Germany’s private sector has recovered less than expected in September amid weakness in domestically driven services. German consumer morale also improved less than expected, a survey showed.

An earlier report showed French business activity slowed to a four-month low in September, with services weaker than expected, as France struggled to contain a surge in new COVID-19 cases.

Traders in the pound and the euro are also worried that Britain and the European Union will fail to agree a free trade deal, which would cause additional economic strain.

“At present the market is once again dominated by concerns about a second wave of infections, above all in Europe, meaning that the dollar is in demand again”, Commerzbank analysts wrote in a morning note.

The dollar is likely to continue to gain as the coronavirus rattles sentiment in Europe, but uncertainty about this year’s U.S. presidential election means it could be prone to more volatile swings.

The pound fell to $1.2692, its lowest since late July, after British Prime Minister Boris Johnson introduced on Tuesday new restrictions on business activity to combat a second wave of the coronavirus.

The dollar was stable against the Swiss franc at 0.9201 after a 0.6% gain from Tuesday when the greenback was bolstered by data showing U.S. home sales surged to their highest level in nearly 14 years in August.

The dollar index, which pits the dollar against a basket of six major currencies, rose to a high of 94.25 on Wednesday, the highest in two months.

The Australian dollar fell to a six-week low of $0.7116. The New Zealand dollar lost 0.56% to $0.6597.

The Reserve Bank of New Zealand held its policy rate at 0.25% but warned of job losses and business closures, which reinforced expectations it would move to negative interest rates in coming months. (Reporting by Julien Ponthus; Editing by Christopher Cushing, Ana Nicolaci da Costa, Larry King)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up