(Adds U.S. data, analyst comments, updates prices) Graphic:...

(Adds U.S. data, analyst comments, updates prices)

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

By Karen Brettell NEW YORK, July 28 - The dollar index bounced off a two-year low on Tuesday but looked primed for further weakness as the United States continued to see a rise in coronavirus cases, while the Federal Reserve is expected to maintain very loose monetary policies.

The dollar index against a basket of currencies =USD gained 0.18% to 93.71, after dropping to 93.47 on Monday, the lowest since June 2018.

“I think the market is just taking a pause, it’s been a fairly relentless dollar selloff,” said Vassili Serebriakov, an FX strategist at UBS in New York.

The continued spread of coronavirus is hampering the U.S. economic recovery, while regions like Europe appear to have the virus contained.

“The global economy has been recovering from COVID somewhat unevenly, but I think the base of the recovery in places like Europe and China is looking more encouraging than in the U.S.,” said Serebriakov. “The dollar is countercyclical, so when the global economy picks up the dollar tends to weaken.”

Florida reported a record one-day rise in coronavirus deaths on Tuesday, and cases in Texas passed the 400,000 mark.

Republicans in the U.S. Senate pushed back on Tuesday against their own party's $1 trillion coronavirus relief proposal, the day after it was unveiled by Majority Leader Mitch McConnell.

Data on Tuesday showed that U.S. consumer confidence fell more than expected in July.

The euro EUR= dipped 0.26% against the dollar to $1.1720, after reaching $1.1781 on Monday, the highest since September 2018.

Ultra-loose Fed policy is also weighing on the U.S. currency.

Investors will be watching for any indicatons that the U.S. central bank will increase its purchases of longer-dated debt, implement yield caps or target higher inflation than it has previously indicated when it concludes its two-day meeting on Wednesday.

Goldman Sachs on Tuesday noted that a potential Fed shift "towards an inflationary bias" along with record high debt levels by the United States government are raising "real concerns around the longevity of the U.S. dollar as a reserve currency."

The dollar remained weak against several currencies on Tuesday.

It dipped 0.29% to 105.06 yen JPY= , after earlier getting as low as 104.94 yen, the weakest since March 13.

Sterling gained 0.49% to $1.2944, the highest since March 11.

======================================================== 
	Currency bid prices at 3:39PM (1939 GMT) 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	  EUR=		$1.1720		$1.1751	 -0.26%		 +4.55%	  +1.1773	 +1.1700 
 Dollar/Yen	   JPY=		105.0600	   105.3700	-0.29%		 -3.49%	  +105.6800   +104.9600 
 Euro/Yen		 EURJPY=	 123.14		 123.81	  -0.54%		 +0.98%	  +123.9800   +123.0200 
 Dollar/Swiss	 CHF=		0.9172		 0.9197	  -0.27%		 -5.23%	  +0.9227	 +0.9156 
 Sterling/Dollar  GBP=		1.2944		 1.2881	  +0.49%		 -2.38%	  +1.2952	 +1.2839 
 Dollar/Canadian  CAD=		1.3365		 1.3354	  +0.08%		 +2.92%	  +1.3406	 +1.3331 
 Australian/Doll  AUD=		0.7161		 0.7149	  +0.17%		 +1.99%	  +0.7176	 +0.7114 
 ar																							  

 Euro/Swiss	   EURCHF=	 1.0751		 1.0808	  -0.53%		 -0.93%	  +1.0827	 +1.0744 
 Euro/Sterling	EURGBP=	 0.9052		 0.9120	  -0.75%		 +7.07%	  +0.9138	 +0.9054 
 NZ			   NZD=		0.6658		 0.6682	  -0.36%		 -1.16%	  +0.6702	 +0.6634 
 Dollar/Dollar																				   

 Dollar/Norway	NOK=		9.1154		 9.0924	  +0.25%		 +3.84%	  +9.1520	 +9.0495 
 Euro/Norway	  EURNOK=	 10.6865		10.6835	 +0.03%		 +8.63%	  +10.7195	+10.6548 
 Dollar/Sweden	SEK=		8.7739		 8.7183	  +0.18%		 -6.14%	  +8.7922	 +8.7142 
 Euro/Sweden	  EURSEK=	 10.2860		10.2671	 +0.18%		 -1.75%	  +10.2966	+10.2584