FOREX-Dollar keeps safe-haven bid as resurgent virus threatens recovery

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, June 26 (Reuters) - The dollar held firm on Friday as
caution over rapid rises in U.S. coronavirus cases cast doubt
over the reopening of the economy, keeping demand for the
safe-haven currency intact.
The dollar index =USD stood at 97.360, having pared a
large part of this week's losses.
Against the yen, the dollar traded at 107.09 yen JPY= ,
having gained 0.5% in the overnight session. It has held gains
of 0.2% so far this week.
The euro eased to $1.1223 EUR= , losing steam after hitting
a one-week peak of $1.1348 on Tuesday though the currency has
maintained weekly gains of about 0.4%.
Sterling slipped to $1.2422 GBP=D4 , off this week's high
of $1.2541 touched on Wednesday.
Also supporting the greenback was the broader rise in
corporate demand towards the end of quarter.
That helped the dollar stay firm despite the stubbornly
upbeat risk appetite seen in global equity markets, which comes
even as new coronavirus infections surge. MKTS/GLOB
"Stock prices remained supported but I doubt they could
retain the current high valuations when more earnings results
will come in next month," said Tatsuya Chiba, manager of forex
at Mitsubishi Trust Bank. "At this point, risk currencies could
slip again versus the yen."
Demonstrating to hit to business from the pandemic, footwear
maker Nike NKE.N reported a surprise loss on Thursday even
though its online sales post a record rise. The U.S. health crisis continued as new daily cases around
the country climbed to record levels and governor of Texas
temporarily halted the state's reopening as infections and
hospitalisations surged. "When you look at things like restaurant bookings data, it
looks as if they are heading back to square one after a strong
recovery," said Kyosuke Suzuki, director of forex at Societe
Generale.
"If this continues day by day, people will likely have to
review their recovery scenario."
Data on Thursday showed weak demand is forcing U.S.
employers to lay off workers, keeping new applications for
unemployment benefits extraordinarily high, even as businesses
have reopened. Initial claims for state unemployment benefits stood at a
seasonally adjusted 1.48 million for the week ended June 20,
down 60,000 from a week earlier but still double their peak
during the 2007-2009 Great Recession.
Elsewhere, the Australian dollar fetched $0.6888 AUD=D4 ,
stuck in its rough $0.68-0.70 range in the past couple of weeks.
The Turkish lira stood flat after the country's central bank
unexpectedly halted a nearly year-long easing cycle on Thursday,
by keeping its key interest rate unchanged at 8.25% and citing
upward pressure on inflation. The Mexican peso hovered above a one-month low after
Banxico, the country's central bank cut its interest rates by 50
basis points as expected late on Thursday.