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Safety bid supports dollar as coronavirus surge shakes confidence

  • Tom Westbrook

    Reuters

Singapore   /   Mon, June 29, 2020   /   09:46 am
Safety bid supports dollar as coronavirus surge shakes confidence A US dollar banknote is pictured behind a protective mask, which is widely used as a preventive measure against the coronavirus (COVID-19), in this illustration taken March 17. (REUTERS/Alexey Pavlishak/File Photo)

A firm dollar kept riskier currencies under pressure on Monday, as a surge in coronavirus cases and the re-imposition of curbs to stop its spread had investors worried that a global economic recovery could be derailed even before it had taken root.

California ordered some bars to close on Sunday, following similar moves in Texas and Florida, as cases nationwide soar to record levels each day. Washington state and the city of San Francisco have paused re-opening plans.

That allowed the greenback to hang on to gains ground out last week, and had riskier currencies such as the trade-exposed Australian and New Zealand dollars parked toward the bottom of ranges they have held for several weeks.

The Aussie was last steady at US$0.6872 and the kiwi at $0.6420 - though both are set for monthly gains of roughly 3 percent as the rising risks to the global recovery have stalled rather than reversed their steep rally.

Against a basket of currencies the dollar was steady not far below a four-week peak on Monday at 97.466. The safe-haven Japanese yen also held at 108.18 per dollar.

“A double-dip US recession is possible if widespread restrictions are re-imposed, leading to a surge in the dollar,” said Commonwealth Bank of Australia FX analyst Joe Capurso.