Dollar stable markets torn between upbeat data and virus fears - GulfToday

Dollar stable, markets torn between upbeat data and virus fears


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The dollar held on to modest gains on Tuesday as upbeat U.S. home sales and Chinese factory data left traders torn between optimism about global growth rebounding and fears a surge in new COVID-19 cases could jeopardise a swift V-shaped recovery.

California and Texas saw record rises in new infections on Monday while in Britain, a reinforced lockdown was imposed in the city of Leicester.

News on the economic front was far better with Wall Street getting a boost from the U.S. housing market quickly recovering in May from a plunge triggered by the pandemic.

A warning from U.S. Federal Reserve Chair Jerome Powell that the outlook for the world's biggest economy was "extraordinarily uncertain", however, kept investors on their toes.

Against a basket of currencies, the dollar index was up 0.27% at 97.686 while the euro lost 0.3% at $1.1209. 


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Over the quarter, the European currency staged a 1.7% comeback after falling by a similar margin during the first three months of the year marked by the coronavirus financial market crash.

"Markets are jumpy. Tension remains between economic and virus pickup," said Moh Siong Sim, an FX analyst at the Bank of Singapore.

The safe-haven Swiss franc slipped marginally. The dollar rose 0.1% against the franc to 0.9521 while it was also climbed against the Japanese yen, another currency considered a safe store of value, and last up 0.1% to 107.715 yen,

Earlier the Chinese yuan and the Australian dollar gained slightly after a survey showed China's factory activity expanded at a stronger pace in June, beating expectations of slowdown from last month.

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