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The ailing greenback has come under pressure this week from
fresh political turmoil in Washington, with news that a grand
jury will investigate allegations of Russian meddling in
November's U.S. election.
The dollar's decline has exacerbated leveraged bets in recent
weeks as hedge funds have increasingly borrowed in the U.S.
currency to invest in global assets such as the euro-area stocks
and bonds.
Broad market positioning data for the week of July 25 showed
short bets against the dollar swollen to their highest levels
since a "taper-tantrum" peak in early 2013 while latest data on
inflows into global equity and emerging market debt funds are at
multi-week highs. NETUSDALL=
"The dollar has been overvalued for a while and that is being
unwound gradually because of greater risk appetite and this may
have more room to go," said James Kwok, head of currency
management at Amundi Asset Management in London.
Beleaguered dollar bulls looked to the U.S. jobs report due at
1230 GMT to turn its fortunes around, at least in the short
term. Economists polled by Reuters expect U.S. employers to have
added 183,000 jobs in July.
The dollar index .DXY was a shade lower at 92.81 and is set to
fall 0.5 percent this week. It fell to a 15-month low on
Wednesday to 92.548.
The greenback has also suffered at the hands of a strengthening
euro, which hit 2-1/2-year highs this week, boosted by dollar
weakness but also the view that the European Central Bank is set
to tighten policy or atleast announce a shift, amid a
brightening economic picture.
The euro EUR=EBS was flat at $1.1869, within striking distance
of a January 2015 high of 1.1910 scaled on Wednesday.
For Reuters Live Markets blog on European and UK stock markets
see Open
(Reporting by Saikat Chatterjee and Jemima Kelly, editing by
Alister Doyle)
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