Dollar Off Lows as Covid Cases Rise, but Remains Set for Another Weekly Loss
Investing.com
Published Jul 02, 2020 02:19PM ET
By Yasin Ebrahim
Investing.com – The U.S. dollar remained on track for a second-straight weekly loss despite turning positive on Friday, as a spike in coronavirus cases in the U.S. cooled the flight to risk and stoked demand for safe-haven greenback.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.14% to 97.28.
The U.S. Centers for Disease Control and Prevention (CDC) on Thursday reported 2,679,230 cases of Covid-19, up by 54,357 cases previously, with the death toll rising 725 to 128,024.
Rising cases stoked investor worries that measures to curb the outbreaks including states rolling back the reopening of businesses could slowed the economic recovery.
The U.S. created 4.8 millionjobs last month, well above economists' forecast of 2.9 million jobs, while the unemployment rate fell to 11.1% from 13.3% in May. Economists expected it to drop to 12.4%.
"While the quick turnaround is very encouraging, sustainability remains in question given the Covid resurgence and the rollback of reopening in some states," Jefferies (NYSE:JEF) said in a note.
The dollar has fallen 5% since hitting a three-year high in March as investor sentiment on risk improved amid a rally in global equity markets following a slump earlier this year.
Adding further pressure on the greenback, the Federal Reserve has rolled out stimulus measures including dollar swap lines in a bid to boost credit markets and steady the economy.
But the dollar funding crunch has eased, with central banks worldwide lowering the use of the Fed's currency facility.
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