* Virus surges in U.S. south and west
* California, Texas, Florida re-imposing restrictions on enterprise
* Threat-currency rally stalled, however greenback additionally struggles to realize
* Graphic: World FX charges in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, June 29 (Reuters) – The greenback struggled to make headway on Monday, and riskier currencies inched forward, as investor sentiment swung between hopes for a world financial restoration and fears {that a} recent wave of coronavirus instances might undermine the revival.
In opposition to a basket of currencies the buck retreated from a one-week excessive hit on Friday and dipped 0.2% to 97.303. The trade-exposed Australian and New Zealand {dollars} rose about 0.2% to close the center of current ranges.
California ordered some bars to shut on Sunday, following related strikes in Texas and Florida, as instances nationwide soar to file ranges. Washington state and the town of San Francisco have paused re-opening plans.
But elsewhere – from New York to Europe and Asia – re-openings proceed apace and knowledge illustrates a swift rebound.
“The controversy continues to be very dwell,” mentioned Westpac FX analyst Sean Callow. “How severely are you going to guess that retreats in reopening in chosen U.S. states are sufficient to truly puncture the rally?”
For now the greenback has dithered quite than deflated.
The Aussie and kiwi are headed for month-to-month good points round 3% however made most of that floor within the early days of June and have tracked sideways since then.
The Aussie, which has gained almost 25% from a greater than 17-year low hit in March, was final up 0.2% at $0.6877. The kiwi rose by the identical margin to $0.6431.
Simultaneous safe-haven good points additionally level to heightened warning, even because the thirst for {dollars} has eased off because the U.S. Federal Reserve has flooded markets with liquidity.
The yen and Swiss franc appear set for his or her greatest months in opposition to the buck this yr, with good points of 0.6% and 1.5% respectively. Every made a small rise on Monday.
Elsewhere, sterling bounced 0.3% from a month-low plumbed on Friday as buyers fretted about whether or not Britain can settle a post-Brexit commerce pact with the European Union. A recent spherical of talks is because of start this week.
RISKS BALANCED
Globally half 1,000,000 folks have died from COVID-19, a few quarter them in the USA.
The bounce in U.S. instances has been most pronounced in a handful of Southern and Western states that reopened earlier and extra aggressively and buyers are carefully watching to see the extent and severity of renewed restrictions.
Elsewhere, rollbacks of lockdowns appear to be bother free and outbreaks in different world hotspots, from Germany to Melbourne and Beijing seem localised, for now.
And financial knowledge continues to shock on the upside.
Earnings at China’s industrial corporations rose for the primary time in six months in Could, China’s nationwide bureau of statistics mentioned on Sunday, suggesting the restoration is gaining traction.
Traders want to eurozone confidence knowledge due at 0900 GMT and German inflation figures at 1200 GMT for the most recent gauge of the area’s financial well being.
Additionally it is an essential week for U.S. knowledge with the ISM manufacturing report on Wednesday and payrolls on Thursday, forward of the Independence Day vacation. Federal Reserve Chair Jerome Powell can be testifying on Tuesday.
The euro is about to wrap up its greatest two months in opposition to the greenback in a yr and a half, as hopes for a united EU response to the virus and a swift regional restoration propel the only foreign money forward about 2.5% for the reason that starting of Could.
The only foreign money rose 0.2% to $1.1239 in Asia on Monday.
“Given the euro space’s excessive (sensitivity) to world commerce, we anticipate extra world uncertainty across the pandemic to maintain any upside capped,” ANZ financial institution analysts mentioned in a notice.
(Reporting by Tom Westbrook; Modifying by Shri Navaratnam)