Dollar Retreats, With Investors Balancing Positive Chinese Data with Ever Increasing COVID-19 Numbers

By Gina Lee – The dollar retreated on Tuesday morning in Asia, giving up it gains from the last session as investors balance positive trade data with increasing COVID-19 figures. China reported a higher-than-expected manufacturing Purchasing Manager’s Index of 50.9 earlier in the day. Meanwhile, COVID-19 continues its rampage, with over 10.2 million cases as of June 30 according to Johns Hopkins University data. U.S. Federal Reserve Chair Jerome Powell warned on Monday that the outlook for the U.S. economy is "extraordinarily uncertain" and is dependent on the virus being contained and government measures to support recovery. Some U.S. states have reported a recent surge of cases as they prepared to re-open and restart their economies. "We've seen cases rising again even in countries that appear to have contained the disease such as Japan and Australia... the bankruptcy of [entertainment group] Cirque de Soleil highlights the fact that the show biz and tourism sector will continue to suffer. The economy is still barely tottering,” Ayako Sera, senior market economist at Sumitomo Mitsui (NYSE:SMFG) Trust Bank, told Reuters. Cirque de Soleil filed for bankruptcy protection on Monday after COVID-19 forced the group to cancel shows and lay off employees. The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.05% to 97.448 by 12:09 PM ET (5:09 AM GMT). The USD/JPY pair was up 0.15% to 107.72. The AUD/USD pair gained 0.31% to 0.6885 and the NZD/USD pair gained 0.12% to 0.6427. The USD/CNY pair fell 0.17% to 7.0671. China’s National People’s Congress Standing Committee passed national security laws for Hong Kong and Macau earlier in the day. The GBP/USD pair gained 0.08% to 1.2306, with the GBP boosted by Prime Minister Boris Johnson’s pledge on Monday to take a “Rooseveltian approach to the U.K.” and increase spending. But doubts remain on how the British government will pay for the approach, as well as on whether a trade pact between the U.K. and the European Union will be signed.