Greenback close to two-month excessive as traders look to extra knowledge, U.S. political developments


© Reuters. FILE PHOTO: FILE PHOTO: U.S. dollar notes are seen in this picture illustration

By Hideyuki Sano

TOKYO (Reuters) – The dollar hovered near a two-month peak against at a basket of currencies on Monday as investors look to a barrage of upcoming economic data and political developments in the United States before making any fresh bets on the U.S. currency.

While a rebound in U.S. stocks on Friday has helped to curb the ascent of the dollar, deemed as a safe-haven, signs of slowdown in the nascent economic recovery and political uncertainties have kept investors on guard.

The stood at 95.544 (). Last week it hit a two-month high of 94.745 last week and posted its biggest weekly rise since early April.

The euro changed hands at $1.1635 (), having dropped to $1.16125 on Friday to its lowest level in two months.

The British pound stood at $1.2767 , slightly above Wednesday’s two-month low of $1.2676.

Data on U.S. currency futures positions released on Friday pointed to more upside in the dollar’s recovery, with speculators holding a big net short position in the greenback.

Data from U.S. Commodity Futures Trading Commission showed speculators held a net short position of $33.989 billion , up from $31.524 billion the week before and near the highest level in almost ten years. (nL2N2GM1PJ)

The flip side of that was a still very large net long positions in the euro, which showed a slight increase last week to $27.922 billion .

“We need to be wary of a weaker euro due to further unwinding of euro long positions. We have no shortage of concerns in Europe including rise of coronavirus infections in France and so on, attempts by European Central Bank policymakers to talk down the euro and the Brexit,” Makoto Noji, chief currency strategist at SMBC Nikko Securities said in report.

Against the yen, the dollar was more subdued at 105.46 yen .

Investors now look to the first U.S. Presidential debate on Tuesday as the election in early November has started to loom large.

“Few people will be trying to bet on the election outcome. At least they will wait until tomorrow’s TV debate,” said Kyosuke Suzuki, director of forex at Societe Generale (OTC:).

Ahead of the debate, the New York Times reported on Sunday President Donald Trump paid extremely little in income taxes in recent years as heavy losses from his business enterprises offset hundreds of millions of dollars in income. (nL1N2GO0AY)

Few investors now expect the U.S. Congress to pass any stimulus package, seen as vital to support the pandemic-stricken economy, before the election.

But there are growing worries the economic recovery is slowing as many of the stimulus programmes have expired, curbing consumer spending.

The week provides markets with more U.S. data to gauge the health of the world’s biggest economy, including consumer confidence on Tuesday, manufacturing survey on Thursday and jobs data on Friday.

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Steven Gregory