NEW YORK (Reuters) – The dollar rose on Wednesday as a surge in coronavirus cases in the United States weighed in on optimism about a rapid economic recovery, and as the United States weighed tariffs on European products.
FILE PHOTO: US dollar bills are seen in this image illustration from November 7, 2016. REUTERS / Dado Ruvic / Illustration
Arizona, California, Mississippi and Nevada on Tuesday reported a record number of new cases of COVID-19, the disease caused by the new coronavirus, while Texas set a record on Monday.
“The positive mood of the market during yesterday’s North American session on the optimism of the economic rebound stagnated overnight, as there may be increasing concern in foreign markets about the increase in cases of COVID-19 in the United States, “analysts at Scotiabank said in a report.
The coronavirus pandemic is causing broader and deeper damage to economic activity than previously thought, the International Monetary Fund said Wednesday, prompting the institution to further cut its global production forecasts for 2020.
Concerns about a rate hike also weighed on risk sentiment and increased demand for the greenback.
The United States is weighing its tariffs on European products and is considering changing tariffs on various products as part of the trade partners’ aircraft dispute, according to a notice from the Office of the United States Trade Representative on Tuesday.
The dollar = USD index gained 0.33% at 96.45. It has fallen from a three-year high of 102.99 in March.
Euro EUR = fell 0.32% to $ 1.1270. It had hit a one-week high of $ 1.1348 on Tuesday after data showed that a slowdown in the eurozone economy eased again this month.
The dollar rose 0.19% to 106.71 JPY = Japanese yen. It fell as low as 106.06 yen on Tuesday, the weakest since May 7.
The New Zealand dollar underperformed after the country’s central bank said the balance of economic risks continues to decline and it is prepared to use additional monetary tools as needed.
The NZD = kiwi last fell 0.91% to $ 0.6430.
Additional reports from Iain Withers in London; Editing by Sonya Hepinstall