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The U.S. dollar edged lower on Monday as investors looked to domestic corporate earnings and upcoming retail data to gauge whether guarded optimism on the country’s economic outlook is justified.

The index that measures the dollar against a basket of six other major currencies – which often serves as a safe-haven for investors seeking high-quality assets in moments of market volatility – was down 0.31% in North American morning trade. The dollar ended its third week of losses on Friday as investors bought into risk-sensitive currencies on bets that the worst of the pandemic’s sweeping impact was over.

The S&P 500 index was up 0.90% on Monday morning and the Dow was up 1.15% as second-quarter earnings kicked off with PepsiCo Inc beating analysts’ estimates. Wall Street banks JPMorgan, Citigroup and Wells Fargo are set to report on Tuesday.

While Refinitiv data suggests second-quarter results will show the second-biggest quarterly drop in corporate earnings since 1968, investors maintain some degree of confidence in the U.S. consumer.

Consumer price index data on Tuesday, retail sales data on Thursday and consumer sentiment data Friday are expected to offer insight into how Americans are spending.

“America’s economy-driving consumer will be in the spotlight, one that it will share with a slew of key events like central bank meetings in Canada and Europe. Just how far down the road to recovery the world’s major economies have traveled will be gleaned from top-tier data. The week’s main sights are on U.S. indicators Thursday on retail spending and weekly jobless claims,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

U.S. coronavirus cases surged over the weekend, as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state, surpassing a peak hit in New York in April.

The euro rose 0.63% to $1.137, maintaining its uptrend since late last month and was on track for its best day since June 22.

Looming large for the single currency this week is a European Union summit on July 17-18, at which leaders need to bridge gaps on a long-term budget. Investors will also watch for whether an agreement on a proposed 750 billion-euro recovery fund for the bloc emerges.

The dollar rallied from a four-week low on Thursday, as weaker U.S. stocks enhanced the currency’s safe-haven appeal for investors following a surge in new coronavirus cases and a U.S. Supreme Court ruling on President Donald Trump’s financial records.

The euro fell from a one-month high versus the dollar, while commodity currencies, which tend to rise when risk appetite increases, also slid against the greenback.

The dollar rally coincided with the Supreme Court ruling on Thursday that a New York prosecutor can obtain Trump’s financial records. But it did prevent, at least for now, the Democratic-led House of Representatives from obtaining the same records.

“The dollar over the last few weeks has been trading on risk-taking levels and taken on its role as a safe haven,” said Ronald Simpson, managing director, global currency analysis at Action Economics in Florida.

“The Supreme Court ruling had a big impact on everything: the dollar rose, (Treasury) yields fell, and stocks got slammed. It puts some risk on Trump right now that something bad may come out,” he added.

Earlier in the global session, the dollar struggled, with the Chinese yuan climbing to a four-month peak, as investors increased positions in Chinese stocks on growing signs of a recovery in the world’s second-largest economy.

Market sentiment turned, however, during the U.S. session. Another contributing factor, apart from the Supreme Court decision, was the renewed surge in COVID cases. More than 60,000 new COVID-19 infections were reported on Wednesday and U.S. deaths rose by more than 900 for the second straight day, the most since early June.

U.S. stocks fell on Thursday, a day after hitting a record closing high. The dollar continues to move in opposition to stocks and risk appetite.

Analysts believed though that despite losses, stocks should remain well-supported on dips.

“The risk backdrop should remain more or less positive for the foreseeable future, given the global fiscal and monetary policy setting,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

In early afternoon trading, the dollar index rose 0.3% to 96.741, after falling to a four-week low of 96.233.

The euro dropped 0.3% to $1.1291, not that far from a one-month high around $1.1371 hit earlier in the day even after German export data failed to meet analysts’ expectations.

The Chinese yuan soared to a four-month high of 6.9808 in the offshore market and was last little changed against the dollar at 6.9950.

The dollar was flat against the yen at 107.25 yen and was up 0.3% versus the Swiss franc at 0.9402 franc.

The dollar nursed losses against most currencies on Thursday as a rally in riskier assets such as global equities and commodities put a dent in safe-haven demand for the U.S. currency.

China’s yuan rose to a four-month high against the greenback, extending recent gains as investors of all stripes increase positions in Chinese stocks due to growing optimism about the world’s second-largest economy.

Lingering worries about the spread of the coronavirus and a light calendar in Asia could keep some currency pairs in a tight range, but the dollar’s losses are gradually increasing as sentiment favours riskier bets on long-term economic growth.

“Rising stocks and a dip in Treasury yields are slight negatives for the dollar, but the market can’t move too far because we still have to worry about the virus,” said Minori Uchida, head of global market research at MUFG Bank.

“A lot of major U.S. economic data have been positive, so this will be less of a trading factor going forward. People are looking for cues from stocks, yields, and hedging costs.”

The dollar bought 0.9381 Swiss franc on Thursday in Asia, close to the lowest in almost four months.

Against the euro, the dollar was quoted at $1.1339, close to a three-week low.

The euro could get a boost later in the day as Germany is scheduled to release export data. Economists expect shipments from the euro zone’s largest economy to rebound sharply in May from a large decline in the previous month.

The greenback was also close to a three-week low against the pound, last trading at $1.2613.

Sterling held steady at 89.91 pence per euro.

The dollar was little changed at 107.33 yen.

Asian stocks rose on Thursday, following gains in the tech-heavy Nasdaq to a record closing high on Wednesday.

The onshore yuan rose to 6.9875 per dollar, breaking past the closely watched level of 7 to reach the highest since March 17.

China’s currency has been a star performer against the dollar as investors shrug off diplomatic tension between Washington and Beijing to focus on China’s improving economy and its attractive technology sector.

The yuan has risen around 2.6% from a seven-month trough against the dollar set on May 27.

While some investors are reluctant to take big positions before the traditional summer holiday season amid uncertainty around the coronavirus pandemic, analysts said sentiment favours more U.S. dollar declines as investors try to look past a recent spike in coronavirus cases in some countries.

Elsewhere in currencies, the Australian dollar stood at $0.6978, close to its strongest level in a month.

The New Zealand dollar was little changed at $0.6573, also close to a one-month high.

The dollar held onto gains on Wednesday as a resurgence of the coronavirus in the United States and the return of lockdowns in some countries boosted safe-haven demand for the U.S. currency.

Risk sentiment was also undermined after Federal Reserve officials expressed concern that rising coronavirus cases could harm economic growth just as stimulus measures start to expire.

On the day, traders will be looking to see whether the dollar’s overnight gains will slow a recent rally in the yuan sparked by optimism about the outlook for Chinese equities.

“The mood changes day by day, but the dollar looks to be supported for now as investors turn more cautious about the virus,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

“The Fed’s comments on the economy sound sombre. There’s reason to worry because it is hard to see when the virus will be brought under control.”

The dollar traded at 107.58 yen in Asia following a 0.3% gain on Tuesday.

Against the euro, the dollar was quoted at $1.1274, also holding to a 0.3% gain from the previous session.

The greenback bought 0.9426 Swiss franc, little changed on the day.

Sterling changed hands at $1.2540 and was quoted at 89.88 pence per euro.

The pound was near three-week highs against both the greenback and the common currency after British Prime Minister Boris Johnson reiterated his commitment to reaching an early trade deal with the European Union.

However, some traders remain reluctant to buy the pound because there is still a risk that trade talks could fail to yield an agreement.

Equities weakened and U.S. Treasury yields edged lower as the number of confirmed coronavirus cases in the United States pushed past 3 million on Tuesday, according to a Reuters tally, stoking fears that hospitals will be overwhelmed.

The United States has the highest known numbers of coronavirus cases and deaths in the world.

Adding to the cautious tone, three Fed officials expressed concern that the surge in infections threatens to pinch consumer spending and job gains just as some stimulus programmes are set to expire.

One Fed policymaker pledged more support ahead from the U.S. central bank.

Some traders warn that the dollar could break out of its range against the yen because currency options are set to expire later Wednesday and Thursday.

The yuan, which rallied against the dollar this week, stood at 7.0241 in offshore trade, down from an almost four-month high reached on Tuesday.

Investors will monitor the opening of onshore trade in the yuan to see if it retreats further from its recent rally.

The Australian dollar bought $0.6945 following a 0.4% decline on Tuesday. Sentiment for the Aussie has taken a hit after coronavirus lockdown measures were reimposed in Australia’s second biggest city of Melbourne on Tuesday.

The New Zealand dollar was little changed at $0.6553

The dollar held steady against most currencies on Monday as investors awaited data expected to show the U.S. services sector stopped contracting, and highlighting the economic recovery from the coronavirus pandemic.

The euro moved in a narrow range before economic data from Germany and the eurozone that are also forecast to show a sharp rebound in corporate activity and retail sales, which would ease concerns about the economic outlook.

A steady rise of new coronavirus infections in the United States has discouraged some investors from taking on excessive risk, but most market participants remain focused on the growing likelihood that major economies will continue to recover.

“When it comes to dollar/yen, recovery expectations are supporting the dollar, but worries about the virus are capping the upside,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“The markets are focused on other currency pairs, like the Australian dollar, which is still in a clear uptrend against the U.S. dollar due to the rise in copper prices.”

The dollar held steady at 107.56 yen on Monday in Asia following a 0.3% gain last week. Market activity was subdued following the July 4 long weekend holiday in the United States.

The euro changed hands at $1.1247. Against the British pound, the common currency bought 90.18 pence.

Sterling moved in a narrow range at $1.2474.

Against the Swiss franc, the dollar was quoted at 0.9455.

The Institute for Supply Management’s index for non-manufacturing activity due later on Monday is expected to rise to 50.0 in June from 45.4 in the previous month, indicating activity stopped shrinking.

The greenback has been locked into narrow trading ranges recently as concerns about a resurgence in U.S. coronavirus infections offset growing optimism about the economy.

The euro will come into focus later in the trading day as Germany, the euro zone’s largest economy, is scheduled to release industrial orders for May.

Retail sales for all of the eurozone will also be released later on Monday. Both indicators are forecast to recover strongly from large declines caused by the spread of the coronavirus.

Elsewhere in currencies, the Australian dollar traded at $0.6944 on Monday in Asia following a 1.2% gain last week.

The Aussie is another market focus ahead of a Reserve Bank of Australia (RBA) policy meeting on Tuesday. Analysts expect that rates will stay at 0.25% amid signs that Australia’s economic downturn will not be as dire as first feared.

Recent gains in prices of copper and other commodities that Australia exports, combined with a more positive tone for the RBA, are likely to support the Aussie, analysts say.

Across the Tasman Sea, the New Zealand dollar was quoted at $0.6535.

The dollar was hemmed into a narrow range on Friday, supported by safe-haven flows as a resurgence of the coronavirus in the United States discouraged some investors from taking on excessive risk.

The yuan was stable in offshore trade before data on China’s services sector, but investors may avoid taking big positions due to worries about diplomatic friction between Washington and Beijing over civil liberties in Hong Kong.

The U.S. economy added more jobs than expected in June, data showed on Thursday, but reaction in the currency market has been muted because another spike in coronavirus infections threatens to once again put the breaks of economic activity.

“New infections in the United States have been on an uptrend since June,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities.

“The market is leaning more toward buying the dollar, particularly against emerging market currencies, because the dollar is considered the safest asset around.”

Against the euro, the dollar was quoted at $1.2395 on Friday in Asia.

The dollar held steady at 0.9469 Swiss franc on Friday after three straight days of gains.

The British pound traded hands at $1.2471.

The dollar was little changed at 107.50 yen.

A wave of coronavirus infections has prompted the halting of or back-pedaling on plans to reopen economic activity in several U.S. states after months of strict lockdowns.

Officials are also taking steps to curtail activity during the extended Independence Day holiday weekend starting on Friday.

Trading in currency markets on Friday may be subdued before the U.S. holiday, but analysts say sentiment favours more gains in the dollar as investors turn cautious.

Relations between the United States and China are also in focus.

The U.S. Senate unanimously approved legislation on Thursday to penalize banks doing business with Chinese officials who implement Beijing’s new national security law for Hong Kong, raising the chances of further friction between the world’s two- largest economies.

In the offshore market, the yuan was little changed at 7.0732 per dollar.

The Australian dollar held steady at $0.6917 on Friday before data expected to show a sharp rebound in retail sales in May.

Across the Tasman Sea, the New Zealand dollar traded at $0.6509.

Fine balance

Improved European economic data boosted risk appetite on Wednesday, while the euro slipped and the dollar index rose slightly as markets balanced hopes for a global economic recovery with surging COVID-19 infections in the United States.

With transmission rates of the coronavirus falling in much of Europe, and economies opening up, IHS Markit’s final euro zone Manufacturing Purchasing Managers’ Index (PMI) moved closer to the 50-mark separating growth from contraction in June.

Germany’s manufacturing sector also contracted at a slower pace as Europe’s largest economy lifted restrictions.

“What the market is now focusing on is how this recovery is panning out,” said Commerzbank FX strategist Thu Lan Nguyen. “The market is pricing in a relatively quick recovery and now we need some proof of that.”

The euro fell 0.2% versus the dollar to $1.12105 at 1018 GMT , as currency markets moved sideways after a rally in which the euro gained 6% against the dollar in May and early June.

The dollar was at 97.442 against a basket of currencies , having fallen overnight but strengthened in early London trading.

Although the dollar has acted as a haven currency for much of the coronavirus crisis, U.S. fundamentals have played a bigger role recently, meaning it can appreciate on better-than-expected data.

U.S. manufacturing data for June, due later on Wednesday, is expected to show a rebound in activity.

“If the data today from the U.S. would disappoint then you might have the indication that maybe the eurozone is faring better, the recovery might be quicker than in the U.S. – I think that’s what’s crucial now,” said Commerzbank’s Thu Lan Nguyen.

ING strategists wrote in a note to clients that euro-dollar should stay around 1.1200 today.

Investors have been betting that the surge in new infections in the U.S. south and southwest will not derail a broader global economic recovery.

But the United States had its biggest spike in new COVID-19 cases on Tuesday since the start of the pandemic and the government’s top infectious disease expert said that number could soon double.

The European Union has excluded the United States from its initial “safe list” of countries from which the bloc will allow non-essential travel from Wednesday.

Australia was also starting a localised lockdown of more than 300,000 people in the suburbs north of Melbourne in Australia after two weeks of double-digit rises in new coronavirus cases in the country’s second most populous state.

The Japanese yen rose around 0.4% versus the dollar, to 107.635, its first session of significant gains in more than a week.

The riskier New Zealand dollar fell in overnight trading before recovering in early London trading, and was up 0.2% on the day at 0.2%.

The Swedish crown was broadly flat against the euro after the Riksbank kept rates unchanged 0%.

After an increase in March, the crown recovered to its pre-coronavirus levels at the start of May and has been broadly stable since. Versus the euro, it was at 10.4745 on Wednesday, down around 0.1% on the day.

“We don’t see today’s decision as a game changer for Sweden’s krona, and so far the impact on the currency has been fairly limited,” ING economist James Smith and strategist Petr Krpata wrote in a note to clients. “We therefore look for EUR/SEK to move towards 10.00 by the year end.”

The Norwegian crown gained versus the dollar and euro as oil prices rose.

Against the euro, it reached a 12-day high of 10.7010 before easing to 10.7255 at 1038 GMT, still up around 0.8% on the day .