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Dollar Down Even Amid Rising COVID-19 Cases

2 Mins read
imageForex5 hours ago (Jul 06, 2020 12:37AM ET)

(C) Reuters.

By Gina Lee – The dollar was down on Monday morning in Asia, reversing its earlier gains. Investors cautiously retreated from the safe-haven asset amid optimism over U.S. services sector activity data due to be released later in the day.

Forecasts prepared by predict a reading of 50 for the Institute for Supply Management non-manufacturing purchasing manager’s index (PMI).

Meanwhile, the number of COVID-19 cases globally is close to 11.5 million as of July 6, according to Johns Hopkins University data.

The U.S. Dollar Index Futures that tracks the greenback against a basket of other currencies slipped 0.37% to 96.940 by 12:29AM ET (5:29 AM GMT). The USD/JPY pair was up 0.20% to 107.71.

“When it comes to dollar/yen, recovery expectations are supporting the dollar, but worries about the virus are capping the upside,” Masafumi Yamamoto, chief currency strategist at Mizuho Securities, told Reuters.

“The markets are focused on other currency pairs, like the Australian dollar, which is still in a clear uptrend against the U.S. dollar due to the rise in copper prices.”

The AUD/USD pair gained 0.38% to 0.6964 and the NZD/USD was up 0.29% to 0.6551. The Reserve Bank of Australia will meet on Tuesday for its policy meeting and is expected to keep rates at 0.25%. The AUD will also receive a boost from rising prices for copper and other export commodities.

But investors will monitor the economic ramifications of the country’s two most populous states closing their borders. Victoria announced the closure of its borders with New South Wales to contain a spike in COVID-19 cases.

The USD/CNY pair fell 0.20% to 7.0517. The CNY got a boost from Chinese shares jumping to their highest point in five years, even amid simmering U.S.-China tensions over weekend drills by both the U.S. and Chinese militaries on the South China Sea.

The GBP/USD pair gained 0.07% to 1.2492.

Dollar Down Even Amid Rising COVID-19 Cases

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