TOKYO (REUTERS) - The US dollar struggled to stem its broad decline on Thursday (Aug 6) as investors worried the US 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 per cent to 92.719, having fallen more than 0.5 per cent 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 US currency has gathered pace since late July on rising perception that US economic recovery could be hobbled by the country's poor performance in containing the Covid-19 outbreak.
The euro changed hands at US$1.1874, having gained 0.5 per cent in the previous day's trade to stand just below Friday's two-year high of US$1.1908, extending its bull run since European leaders agreed on a recovery fund on July 21.
The common currency held an upper hand against the yen, trading at 125.27 yen, having hit its highest level since April last year in the previous session.
The US currency traded at 105.52 yen, having eased a tad in the past two days.
The dollar extended losses on Wednesday after the ADP National Employment Report showed US private payrolls growth slowed sharply in July, suggesting the labour market recovery was faltering.
US 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 US 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 US$1.3170, last quoted at US$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 per cent and its bond-buying stimulus programme unchanged at £745 billion (S$1.34 trillion).
The US 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, having hit a five-month of 6.9324 on Wednesday.
Gold was by far the best performer, hitting a record high of US$2,055.3 per ounce overnight and last stood at US$2,039.5, supported by demand for hedge against the dollar's decline.
