# U.S. dollar climbs as new virus outbreaks threaten global outlook Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-06-29 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: Dollar Rises to One-Week High Amid New Coronavirus Outbreaks Meta Description: Stay informed with the latest on the U.S. dollar's rise amidst new coronavirus outbreaks impacting global economic recovery. Learn more here. URL: https://financedigest.com/u-s-dollar-climbs-as-new-virus-outbreaks-threaten-global-outlookhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-06-29t014440z1lynxnpeh5s02krtroptp4global-forex-1736838262027-compressed.jpg) By Gertrude Chavez-Dreyfuss and Saikat Chatterjee NEW YORK/LONDON (Reuters) – The U.S. dollar rose on Tuesday to a one-week peak, on track for its largest single daily gain in about two weeks, as new coronavirus outbreaks threatened to derail a global [economic recovery with the Australian dollar](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") and the British pound leading losses. A decline in [risk appetite benefits the dollar](https://www.financedigest.com/u-s-dollar-advances-vs-major-currencies-as-risk-appetite-fades.html "U.S. dollar advances vs major currencies as risk appetite fades") as a safe haven. Fears over the spread of the highly infectious Delta variant of the virus are denting [sentiment at a time markets are on edge after the Federal Reserve shocked traders with a hawkish tilt earlier this month](https://www.financedigest.com/sentiment-among-german-exporters-falls-for-third-month-in-a-row-ifo.html "Sentiment among German exporters falls for third month in a row -Ifo"). Indonesia is grappling with record-high cases, while Malaysia is [set to extend](https://www.financedigest.com/wall-street-set-to-open-higher-oil-prices-extend-losses.html "Wall Street set to open higher, oil prices extend losses") a lockdown and Thailand has announced new restrictions. [Spain and Portugal are imposing travel restrictions on unvaccinated British](https://www.financedigest.com/mallorca-emerges-as-this-years-summer-hotspot-as-british-buyers-return-to-spain-in-their-masses.html "MALLORCA EMERGES AS THIS YEAR’S SUMMER HOTSPOT AS BRITISH BUYERS RETURN TO SPAIN IN THEIR MASSES") travellers. There is an extra layer of uncertainty in the [global recovery with economies](https://www.financedigest.com/september-tropical-cyclones-cost-global-economy-more-than-4bn-according-to-aon-catastrophe-report.html "September tropical cyclones cost global economy more than bn, according to Aon catastrophe report") like South Africa, Australia, and parts of Asia with their lockdown restrictions because of the Delta variant,” said Simon Harvey, senior FX market analyst at Monex Europe in London. We went from a certain and stable background in Q2 to a lot more uncertainty going [forward and markets](https://www.financedigest.com/the-biochemistry-analyser-market-is-expected-to-witness-an-escalation-going-forward.html "The Biochemistry Analyser Market is expected to witness an escalation going forward") have to price that,” he added. In [late morning trading in New York](https://www.financedigest.com/stellantis-unveils-ram-ev-pickup-to-debut-late-in-2024-at-new-york-auto-show.html "Stellantis unveils Ram EV pickup, to debut late in 2024, at New York auto show"), the dollar index, a gauge of its value against six major rivals, rose 0.6% to 92.124, on course for its biggest percentage gain since mid-June. The greenback’s correlation with general risk appetite as seen from the global daily case loads of COVID-19 has weakened in recent weeks as [market attention has been more focused on when the Fed](https://www.financedigest.com/markets-start-signalling-fed-may-be-going-too-far-amundi.html "Markets start signalling Fed may be going too far – Amundi") will exit its massive policy stimulus. But that correlation has started to strengthen [since last week](https://www.financedigest.com/dollar-steadies-near-16-week-low-yuan-set-for-biggest-weekly-gain-since-2005.html "Dollar steadies near 16-week low, yuan set for biggest weekly gain since 2005"). The [dollar also got a boost after data](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week") showed U.S. consumer confidence increased in June to its highest level since the [COVID-19 pandemic](https://www.financedigest.com/pandemic-restrictions-that-hampered-the-circulation-of-viruses-other-than-covid-19.html "Pandemic restrictions that hampered the circulation of viruses other than COVID-19") started more than a year ago. That boosted expectations for [strong economic growth in the second quarter](https://www.financedigest.com/italys-mps-sees-safe-habour-ahead-after-strong-quarter.html "Italy’s MPS sees ‘safe habour’ ahead after strong quarter"). The euro declined 0.3% to $1.1892, edging [back toward the 2-1/2-month low of $1.1847 touched](https://www.financedigest.com/putting-the-human-touch-back-into-banking-magazine.html "“Putting the human touch back into banking”-Magazine") on June 18. The market had been positioned long of the single [currency on optimism regarding the vaccine catch-up trade](https://www.financedigest.com/currency-trading-in-a-spin-after-polish-explosion.html "Currency trading in a spin after Polish explosion") in the region (but) forecasts that the Delta variant of COVID could spread through Europe (in) the summer months could now be undermining confidence in this trade,” Rabobank strategist Jane Foley wrote in a report, cutting a one-month euro forecast to $1.19 from $1.20. Elsewhere, sterling slipped back [toward a two-month low](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low"), weakening 0.4% to $1.3825. The [Australian dollar](https://www.financedigest.com/asian-stocks-make-7-month-highs-australian-dollar-gains-on-hot-inflation.html "Asian stocks make 7-month highs, Australian dollar gains on hot inflation"), seen as a liquid proxy for risk appetite, fell 0.6% to US$0.7520 amid concerns over renewed COVID-19 lockdowns across parts of the country. Graphics: Global [COVID cases](https://www.financedigest.com/hungarian-doctors-warn-of-sad-christmas-as-covid-cases-soar.html "Hungarian doctors warn of ‘sad Christmas’ as COVID cases soar") – https://fingfx.thomsonreuters.com/gfx/mkt/xegpbzmlypq/Global%20COVID%20cases.JPG ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/global-covid-cases-450x340-1736838261914-compressed.jpg) [(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by Steve Orlofsky and Emelia Sithole-Matarise)](https://www.financedigest.com/london-reclaims-place-as-preeminent-global-financial-centre-for-the-first-time-since-2013-according-to-global-regulatory-outlook-report-from-duff-phelps.html "London reclaims place as preeminent global financial centre for the first time since 2013, according to Global Regulatory Outlook report from Duff & Phelps") --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---