By Hideyuki Sano
TOKYO (Reuters) – The dollar struggled to stem its broad decline on Thursday as investors worried the U.S. economic recovery may lag other countries due to a high level of coronavirus infections while the global economy slowly gets back on its feet.
The dollar’s index against a basket of currencies edged down 0.1% to 92.719, having fallen more than 0.5% in the previous session to approach its two-year low of 92.539 marked last Friday.
“Dollar-selling seems to have resumed. We are having the same structure we saw in July,” said Shinichiro Kadota, senior strategist at Barclays.
Decline in the U.S. currency has gathered pace since late July on rising perception that U.S. economic recovery could be hobbled by the country’s poor performance in containing the COVID-19 outbreak.
The euro changed hands at $1.1874
The common currency held an upper hand against the yen, trading at 125.27 yen
The U.S. currency traded at 105.52 yen
The dollar extended losses on Wednesday after the ADP National Employment Report showed U.S. private payrolls growth slowed sharply in July, suggesting the labour market recovery was faltering.
U.S. services industry activity gained momentum in July as new orders jumped to a record high, but hiring declined, a separate survey by the Institute for Supply Management (ISM) also showed.
“Although the headline figure from the survey was strong, the employment component while ADP data was weak. These point to downside risks to Friday’s payroll data,” said Kadota at Barclays.
With more than 30 million people on jobless benefits, recovery in employment is seen as critical to the U.S. economic outlook, with many investors counting on another fiscal stimulus to support the economy.
Top congressional Democrats and White House officials appeared to harden their stances on new coronavirus relief legislation, however, as negotiations headed toward an end-of-week deadline with no sign of an agreement.
Sterling also edged near Friday’s 4-1/2-month high of $1.3170, last quoted at $1.3137
The Bank of England looks set to hold off from taking further action at its policy review later in the day, by keeping its benchmark interest rate at an all-time low of 0.1% and its bond-buying stimulus programme unchanged at 745 billion pounds ($980 billion).
The U.S. dollar sank to its lowest level in almost half a year against the Canadian dollar to C$1.3262
The offshore Chinese yuan traded at 6.9423 per dollar
Gold was by far the best performer, hitting a record high of $2,055.3 per ounce
(Reporting by Hideyuki Sano; Editing by Lincoln Feast.)
