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* Dollar off two-month high after best week in almost sixmonths
* Big net short dollar position points to chance of furtherrise
* Euro hampered by concerns about infections
* Turkish lira at record low as rate hike boost fades
* Graphic: World FX rates in 2020 By Ritvik CarvalhoLONDON, Sept 28 (Reuters) - The dollar hovered near atwo-month peak against a basket of currencies on Monday asdoubts about economic recovery persisted before a barrage ofeconomic data and political developments in the United States.
A rebound in U.S. stocks on Friday has helped curb the ascentof the dollar, considered a safe haven, but signs of slowdown inthe nascent recovery from the pandemic and politicaluncertainties have kept investors on guard.The dollar index slipped to 94.21 . It reached atwo-month high of 94.745 last week and posted its biggest weeklyrise since early April. Against the yen, the dollar was moresubdued at 105.36 yen .
The pound jumped to $1.2896 on hopes Britain couldsecure a Brexit trade deal with the EU.The euro rose 0.3% to $1.1661 after dropping to$1.16125 on Friday, its lowest in two months.
"Rising global and notably European risk aversion continueto be clearly U.S. dollar positive, and notably investorsentered this period of questioning the risk/reflation/recoverytheme stretched on dollar shorts," said Christin Tuxen, head ofresearch at Danske Bank.
Friday's data on U.S. currency futures positions alsosuggested the dollar had room to rise further, with speculatorsholding a big net short position in the currency which theycould move to cover if the dollar moves higher. U.S. Commodity Futures Trading Commission's broad measure ofdollar positioning showed speculators' net short position roseto $33.989 billion last week , up from $31.524billion the week before and near its highest in almost a decade. The flip side of that was a large net long position in theeuro, which inched up last week to $27.922 billion ."We think euro/dollar should find good long-term demandbelow the 1.1600 area, but really require some better news onthe global recovery - effective lockdowns, vaccines, newstimulus - before the euro/dollar rally fully resumes," ING saidin a note to clients.Investor attention may now turn to the first U.S.presidential debate on Tuesday.
"Few people will be trying to bet on the election outcome.At least they will wait until tomorrow's TV debate," saidKyosuke Suzuki, director of forex at Societe Generale.Meanwhile, worries are growing that the economic recovery isslowing as many stimulus programmes have expired, curbingconsumer spending.This week will bring more data on the health of the world'sbiggest economy, including consumer confidence on Tuesday, amanufacturing survey and consumer data on Thursday, and jobsdata on Friday.Elsewhere, the Turkish lira briefly dropped 1.6% to a recordlow of 7.8000 per dollar .The lira had enjoyed a rare bounce after an interest rateincrease late last week, but the gains faded amid scepticismabout how it would filter through into market rates. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Dollar hovers near 2-month high Dollar shorts near 9-year high ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Ritvik Carvalho; additional reporting by HideyukiSano in Tokyo; Editing by Kirsten Donovan and Tomasz Janowski)
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