June 26, 2020 / 2:53 PM / 12 days ago

FOREX-U.S. dollar rises as surge in coronavirus cases boosts haven bid

    * U.S. virus cases surge; risk appetite falls
    * U.S. spending, income data mixed, shows economy weathering storm
    * Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh

 (Recasts, adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 26 (Reuters) - The safe-haven dollar rose on Friday, as investors grew cautious about a
resurgence in U.S. coronavirus cases that has cast doubts on expectations about a V-shaped recovery for
the world's largest economy.
    Currencies that thrive with higher risk appetite such as the euro, sterling, as well as
commodity-linked currencies like the Australian, New Zealand, and Canadian dollars struggled against the
greenback.
    Cases rose across the United States by at least 39,818 on Thursday, the largest one-day increase of
the pandemic, with Texas becoming the new hot spot for the novel coronavirus. More than 36,000 new U.S.
cases were recorded on Wednesday, a few hundred shy of the record 36,426 on April 24.
    "There's an inverse correlation between the risk sentiment and the dollar," said Erik Bregar, head of
FX strategy, at Exchange Bank of Canada. "Whenever we get headlines that hurt risk sentiment, that helps
the dollar." 
    In midmorning trading, the dollar rose 0.2% against a basket of currencies to 97.571.
    The dollar showed little reaction after the data showed U.S. consumer spending, which accounts for
more than two-thirds of U.S. economic activity, jumped 8.2% last month. That was the largest increase
since the government started tracking the series in 1959.
    That said, personal income fell 4.2% last month. 
    "On balance, today’s mixed numbers validate the view that the economy has weathered the worst of the
coronavirus but underscore what’s expected to be a choppy road to recovery," said Joe Manimbo, senior
market analyst at Western Union Business Solutions in Washington. 
    The euro, meanwhile, reversed gains against the dollar to trade 0.1% lower at $1.1202.
Traders said there were $2 billion in option expiries in the currency pair that went off at earlier in the
session at the $1.12 strike.
    That said, the euro was on track to end the week on a positive note.
     Bank of America Merrill Lynch's trading platforms and broader positioning surveys indicate currency
markets are long euro/dollar, though positioning is not stretched.
    In other currencies, the commodity-tied units fell, with the Australian dollar down 0.6% at US$0.6885
. The U.S. dollar gained 0.6% at C$1.3712.
    
    ========================================================
    Currency bid prices at 10:45AM (1445 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1202        $1.1217     -0.13%         -0.07%      +1.1239     +1.1196
 Dollar/Yen       JPY=        107.1600       107.1900    -0.03%         -1.56%      +107.2400   +106.8100
 Euro/Yen         EURJPY=     120.05         120.23      -0.15%         -1.56%      +120.3300   +119.8100
 Dollar/Swiss     CHF=        0.9490         0.9483      +0.07%         -1.94%      +0.9496     +0.9470
 Sterling/Dollar  GBP=        1.2329         1.2414      -0.68%         -7.03%      +1.2437     +1.2321
 Dollar/Canadian  CAD=        1.3704         1.3636      +0.50%         +5.53%      +1.3714     +1.3627
 Australian/Doll  AUD=        0.6848         0.6885      -0.54%         -2.48%      +0.6895     +0.6842
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0634         1.0639      -0.05%         -2.01%      +1.0645     +1.0629
 Euro/Sterling    EURGBP=     0.9086         0.9030      +0.62%         +7.48%      +0.9089     +0.9024
 NZ               NZD=        0.6408         0.6428      -0.31%         -4.88%      +0.6450     +0.6407
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.7335         9.6582      +0.78%         +10.88%     +9.7539     +9.6443
 Euro/Norway      EURNOK=     10.9030        10.8420     +0.56%         +10.85%     +10.9225    +10.8260
 Dollar/Sweden    SEK=        9.3655         9.3147      +0.41%         +0.19%      +9.3770     +9.3085
 Euro/Sweden      EURSEK=     10.4944        10.4515     +0.41%         +0.24%      +10.5015    +10.4490
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Addition reporting by Saikat Chatterjee in London; editing by
Jonathan Oatis)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below