DOLLAR LOSES LUSTER AS COVID-19 CASES RESURGE

The dollar was on the defensive against more growth-sensitive currencies on Thursday, following upbeat US and European economic data but renewed worries about the coronavirus blunted more aggressive risk taking, Hideyuki Sano wrote for Reuters on July 2, 2020.

The market sentiment gained an additional boost from the news that a COVID-19 vaccine developed by German biotech firm BioNTech and US pharmaceutical giant Pfizer has shown potential and was found to be well tolerated in early-stage human trials. Sterling traded at $1.2477, flat in early Thursday trade but having gained 1.1% so far this week. The Australian dollar fetched $0.6919, having gained 0.7% on the week. The euro changed hands at $1.1252 , maintaining its gain of 0.3% since the start of week.

US manufacturing activity rebounded more than expected in June, with the manufacturing activity index by the Institute for Supply Management (ISM) hitting its highest in 14 months as firms and businesses resumed operations.

Similar surveys from China, Germany and France all pointed to a recovery in factory activity while the ADP National Employment Report showed June private payrolls increased 2.369 million jobs. Data for May was revised upward to show payrolls surging 3.065 million, instead of tumbling 2.76 million as previously estimated.