Dollar Up as Coronavirus Cases Spike Again.
The dollar was up on Tuesday morning in Asia, with U.S. Treasury yields and fears of a second wave of COVID-19 cases increasing investor demand for dollars.
South Korea reported 27 new cases for May 11, breaking a streak of single-digit cases as it eased social distancing measures.
The cases, stemming from a nightclub in Itaewon, led the government to postpone reopening high schools for the academic year.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.06% to 100.330 by 11:26 AM ET (4:26 AM GMT).
“It’s a little bit of yield support (for the dollar) and a general return of nerves,” Westpac FX analyst Sean Callow told CNBC, as April’s surge in riskier currencies fades away.
“Our base case has been for a while now that the risk bounce was overdone, we just don’t think (recovery) is going to be a straight line,” he added.
The USD/JPY pair was down 0.26% to 107.38, with the yen saw an overnight loss of around 1% to sit at the bottom end of a range it has kept since mid-April.
The GBP/USD pair was down 0.12% to 1.2320 even after Prime Minister Boris Johnson’s government released a 50-plus-page “plan to rebuild” overnight.
“Mixed start to the week for the pound - with the cautious U.K. lockdown easing announced by PM Johnson having little lasting impact on the currency after an initial rally in early Asia trading,” Viraj Patel, FX and global macro strategist at Arkera, told CNBC.
“Instead, the dollar remains supported by rising U.S. yields.”