Dollar steadies as U.S. coronavirus cases surge ahead of holiday

The dollar traded in a narrow range on Friday, lifted by safe-haven bid as the surge of new cases in the United States quelled risk appetite.

The yuan steadied after China’s services sector rebounded and investors avoided bigger positions due to the diplomatic conflict between the U.S. and China over the Hong Kong security law.

The dollar traded at 107.57 on the yen and steadied at 0.9460 Swiss franc after three days of consecutive gains.

The euro stood at $1.1243 in Asian trade. The pound bought 1.2465 on the dollar and 90.20 pence per euro.

A resurgence of the coronavirus in several U.S. states halted plans for economic re-opening. Officials are also imposing measures to curb social activity on the upcoming July 4 holiday.

Gains in Asian currencies were capped ahead of the U.S. holiday. Analysts say that the market sentiment is favoring the dollar as investors turn cautious. 

The diplomatic friction between the U.S. and China is also closely watched. The U.S. Senate approved legislation to penalize banks doing business with Chinese officials who voted for the passage of the Hong Kong security law.

In onshore trade, the yuan stood at 7.0665. The Aussie steadied at $0.6921 and the kiwi traded at $0.6514.