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FOREX-Dollar slips as rally loses momentum – Reuters

The dollar fell to one-weeklows on Monday as investors questioned whether a rally that lastweek sent the greenback to more than four-month highs had runout of steam. The dollar has gained as a rise in U.S. Treasury yieldshighlighted the wide interest rate gap between the United Statesand other countries. But the surge was stymied by soft April U.S. consumer pricedata published last week that introduced doubts aboutexpectations that the Federal Reserve would raise rates as manyas four times in 2018. “The momentum behind the dollar move is starting to stall alittle bit,” said Mark McCormick, North American head of FXstrategy at TD Securities in Toronto. “Where we are right now ismarkets are trying to figure out whether or not they want totake the dollar higher.” The index fell 0.29 percent on Monday to 92.270. Ithas fallen from 93.416 last Wednesday, the highest since Dec.22. Growing worries about the U.S. budget deficit, which isprojected to balloon to more than $1 trillion in 2019 due to agovernment spending splurge and large corporate tax cuts, havealso undermined the dollar, along with concerns about thecountry’s current account deficit. "Barring a significant, and unlikely, pickup inproductivity, a persistent USD rally is unlikely as the twindeficits crowd out private investment by raising borrowingcosts," Hans Redeker, global head of currency strategy at MorganStanley in London, wrote in a note. The euro strengthened even as investors kept a wary eye onpolitical events in Italy. Italy’s anti-establishment 5-Star Movement and the far-rightLeague, both hostile to European Union budget rules, spent theweekend in talks to forge a common policy program. The partieswere adversaries as recently as March but now appear likely toform Italy’s next government. The euro gained 0.41 percent to $1.1991, havingfallen last week to $1.1823, its weakest since Dec. 22. Investors are focused this week on speeches by Fed andEuropean Central Bank officials, as well as German data onTuesday that is expected to show some slowdown in economicgrowth. ======================================================== Currency bid prices at 9:33AM (1333 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1991 $1.1942 +0.41% -0.04% +1.1996 +1.1940 Dollar/Yen JPY= 109.5100 109.3800 +0.12% -2.80% +109.5900 +109.2200 Euro/Yen EURJPY= 131.34 130.59 +0.57% -2.84% +131.3700 +130.5100 Dollar/Swiss CHF= 0.9960 1.0004 -0.44% +2.23% +1.0008 +0.9958 Sterling/Dollar GBP= 1.3593 1.3541 +0.38% +0.60% +1.3602 +1.3540 Dollar/Canadian CAD= 1.2756 1.2791 -0.27% +1.42% +1.2794 +1.2752 Australian/Doll AUD= 0.7557 0.7542 +0.20% -3.13% +0.7565 +0.7542 ar Euro/Swiss EURCHF= 1.1947 1.1944 +0.03% +2.21% +1.1980 +1.1944 Euro/Sterling EURGBP= 0.8820 0.8817 +0.03% -0.71% +0.8827 +0.8811 NZ Dollar/Dolar NZD= 0.6946 0.6966 -0.29% -1.98% +0.6974 +0.6938 Dollar/Norway NOK= 7.9836 8.0004 -0.21% -2.72% +8.0012 +7.9651 Euro/Norway EURNOK= 9.5761 9.5525 +0.25% -2.77% +9.5830 +9.5340 Dollar/Sweden SEK= 8.5907 8.5937 +0.34% +4.75% +8.6034 +8.5709 Euro/Sweden EURSEK= 10.3023 10.2670 +0.34% +4.71% +10.3088 +10.2594 (Additional reporting by Tom Finn in London; editing byJonathan Oatis)

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