English>

MarketNews

U.S. dollar posts modest gains on renewed virus fears - REUTERS

JUNE 30, 2020

BY  Gertrude Chavez-Dreyfuss


NEW YORK (Reuters) - The dollar firmed modestly on Tuesday, lifted by renewed concerns about the spread of the novel coronavirus, as countries around the world and some U.S. states imposed new lockdowns, stalling their paths to economic recovery.

Some analysts said the dollar may have also benefited from the month-end and quarterly-end rebalancing flows.

That said, the dollar was on track to end both the second quarter and the month of June on a negative note. Investors sold the dollar and bought currencies that benefited from higher risk appetite as countries during the period looked to reopening their economies and anticipated developments on a new vaccine for the virus.

“Risk is off a little bit, so you’re seeing the dollar gaining a little bit. But it’s not a crazy risk-off day,” said John Doyle, vice president of dealing and trading, at Tempus, Inc. in Washington.

“There are new concerns. The warnings from the WHO, smaller headlines that added to a bigger story such as new lockdowns in places that you think may be past it,” he added.

The United States saw a 46% increase in new cases of COVID-19 in the week ended June 28 compared to the previous seven days, with 21 states reporting positivity test rates above the level that the World Health Organization has flagged as concerning.

WHO President Tedros Adhanom Ghebreyesus said the coronavirus pandemic is far form being over even though many countries have made some progress.

In late morning trading, the dollar index was up 0.1% at 97.530, holding onto overnight gains after upbeat U.S. home sales data boosted Wall Street.

On the quarter and month, the dollar was on pace for losses of 1.4% and 0.8% respectively.

The dollar also gained versus the yen, up 0.1% at 107.725 JPY=EBS

The euro, meanwhile, fell 0.3% against the dollar to $1.1212, pressured by data showing underlying price pressures dropped again in the euro zone. That underscored fears that consumer price growth will remain anaemic for years.

Over the quarter, the European currency staged a 1.6% comeback after falling by a similar margin during the first three months of the year marked by the coronavirus financial market crash. For the month of June, the euro was up 0.9%.

Traders said there remains a barrier of $1.1200 for the euro on the downside

Sterling reversed losses against the dollar to trade up 0.2% at $1.2328 GBP=D3. Earlier in the session, the pound lost ground after Britain's Office for National Statistics said the economy shrank by 2.2% between January and March, its worst performance since 1979, as households slashed their spending.

The safe-haven Swiss franc CHF=EBS gained a little bit against the dollar. The greenback was last at 0.9499 franc CHF=EBS, down 0.2%.

SEE HOW MUCH YOU GET IF YOU SELL

NGN
This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics