FOREX-Dollar edges higher as virus worries sap risk appetite

* Dollar index 0.03% lower
* Pound near 3-week highs before government releases
spending
plans

(New throughout, updates prices, market activity, comments to
U.S. market open; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, July 7 (Reuters) - The U.S. dollar inched higher
against a basket of currencies on Tuesday, holding above the
near two-week low hit in the previous session, as investors
turned uneasy over new coronavirus flare-ups and local lockdowns
in some countries.
The U.S. Dollar Currency Index =USD , which measures the
greenback's strength against six major currencies, was 0.03%
higher at 96.774. On Monday, the index had fallen as low as
96.565 with its 50-day moving average slipping below its 200-day
average, viewed as a bearish signal.
"While risk appetite has held the upper hand, pushing stocks
higher and the dollar lower, its grip remains slippery," said
Joe Manimbo, senior market analyst at Western Union Business
Solutions in Washington.
"Data and virus headlines hold the keys to the outlook," he
said.
The dollar, viewed as a safe haven, benefits when investors
bail on riskier assets.
Riskier currencies such as the commodity-driven Aussie
AUD=D3 , Norwegian crown NOK=D3 and the Swedish crown
SEK=D3 , which have rallied strongly since April alongside
increased risk appetite in global markets, eased on Tuesday.
Lockdown measures were reimposed in Australia's second
biggest city on Tuesday, confining Melbourne residents to their
homes unless undertaking essential business for six weeks, as
officials scramble to contain a coronavirus outbreak.
In the United States, Florida's greater Miami area became
the latest hotspot to roll back its reopening as virus cases
surged nationwide by the tens of thousands and the U.S. death
toll topped 130,000. U.S. health official Anthony Fauci said on Monday that the
current state of the COVID-19 outbreak in the United States "is
really not good." The surge in U.S. coronavirus cases has made business
owners "nervous again," Atlanta Federal Reserve president
Raphael Bostic said on Tuesday. Sterling held near a three-week high against the dollar as
investors awaited details of the government's plans to support
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GRAPHIC: Dollar death cross https://tmsnrt.rs/2BBUUqM
GRAPHIC: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
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