Picture used for illustration.
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.
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.
The U.S. currency gained more than 0.2% against a basket of currencies, as risk sentiment soured in early trading in Europe.
The dollar was marginally higher in narrow ranges against most currencies on Tuesday as renewed concerns about diplomatic tension between the United States and China and rising coronavirus cases put a dent in risk appetite.
Markets rose last week after unexpectedly strong U.S. jobs data despite some American states reporting record new coronavirus infections.
The US economy grew at a record pace in the third quarter as the government injected more than $3 trillion worth of pandemic relief which fueled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal.
Aircraft manufacturers are hit by the devastating impact of the coronavirus pandemic on the aviation industry. The number of global commercial aircraft orders was zero during the month of September.
Peugeot manufacturer PSA Group returned to revenue growth in its core autos division in the third quarter, recovering from a slump during coronavirus lockdowns, though the prospect of new restrictions hit French shares.
The Bank of Japan (BOJ) trimmed its economic growth and inflation forecasts for the current fiscal year (2020-21) on Thursday but offered a more upbeat view on the recovery outlook, signalling that it has delivered enough stimulus for the time being.