* ADP jobs report in June shows hiring
* U.S. manufacturing data rises
* Fed minutes reiterates downbeat U.S. outlook
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(New throughout, updates prices, market activity, comments, adds Fed minutes)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 1 (Reuters) - The dollar retreated on Wednesday in choppy trading, as generally solid
U.S. economic data and improving European numbers diminished its appeal as a safe haven, though the
currency's outlook remained upbeat given renewed risks posed by the novel coronavirus.
The greenback kicked off the third quarter with a decline against currencies that perform well in
times of risk appetite such as the Australian, New Zealand, and Canadian dollars. It also fell against the
euro and sterling.
Analysts said the dollar could still gain, with the resurgence of COVID-19 cases and the potential for
renewed lockdowns in U.S. states deemed hot spots.
"In a service economy like the U.S., those that generate the highest number of jobs are in the
high-contact businesses such as restaurants, movie theaters, and exhibition parks, which I think will come
to a grinding halt," said Boris Schlossberg, managing director at BK Asset Management in New York.
"There's a significant risk of reclosing some of the states. There's still a lot of risk-off flows,
and the dollar could be the beneficiary of those flows," he added.
Also on Wednesday, the Federal Reserve released the minutes of its last policy meeting and said the
U.S. economic outlook remains highly uncertain and reiterated that a full economic recovery hinges on the
virus being under control. The dollar briefly extended losses against the yen and euro after the minutes.
"The minutes underlined the message from the economic projections that officials are fairly downbeat
about the economic outlook," said Andrew Hunter, senior U.S. economist at Capital Economics.
The dollar, meanwhile, reacted little to the ADP National Employment Report, which showed June private
payrolls increased by 2.369 million jobs. Data for May was revised upward to show payrolls surging 3.065
million, tracking a surprise rebound in job reported by the government, instead of tumbling 2.76 million
as previously estimated. The dollar did lose ground as a safe haven, after U.S. manufacturing data showed a reading of 52.6,
suggesting an expansion for the month of June. In Europe, IHS Markit's final euro zone Manufacturing Purchasing Managers' Index moved closer to the
50 mark separating growth from contraction in June. In afternoon trading, the dollar was down 0.3% against a basket of currencies =USD at 97.15.
Although the dollar has acted as a haven currency for much of the pandemic, U.S. fundamentals have
also played a major role, meaning it can appreciate on better-than-expected data. Against the yen, the dollar fell 0.4% to 107.47 yen JPY=EBS . Analysts said the yen's rise was safe
haven-related given declining stock markets, especially in Asia.
The euro, meanwhile, rose 0.2% to $1.1248 EUR=EBS . The currency rallied 6% against the dollar in May
and early June.
The Australian AUD=D3 and New Zealand dollars NZD=D3 both rose against the greenback.
========================================================
Currency bid prices at 3:28PM (1928 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1250 $1.1231 +0.17% +0.36% +1.1274 +1.1186
Dollar/Yen JPY= 107.4600 107.9200 -0.43% -1.29% +108.1600 +107.3700
Euro/Yen EURJPY= 120.92 121.22 -0.25% -0.84% +121.4700 +120.2700
Dollar/Swiss CHF= 0.9459 0.9471 -0.13% -2.26% +0.9493 +0.9445
Sterling/Dollar GBP= 1.2480 1.2399 +0.65% -5.88% +1.2490 +1.2360
Dollar/Canadian CAD= 1.3581 1.3573 +0.06% +4.58% +1.3601 +1.3545
Australian/Doll AUD= 0.6918 0.6902 +0.23% -1.47% +0.6943 +0.6878
ar
Euro/Swiss EURCHF= 1.0644 1.0641 +0.03% -1.92% +1.0661 +1.0613
Euro/Sterling EURGBP= 0.9013 0.9057 -0.49% +6.61% +0.9079 +0.9015
NZ NZD= 0.6476 0.6452 +0.37% -3.86% +0.6489 +0.6441
Dollar/Dollar
Dollar/Norway NOK= 9.5167 9.6150 -1.02% +8.41% +9.6367 +9.5081
Euro/Norway EURNOK= 10.7057 10.8110 -0.97% +8.82% +10.8280 +10.6990
Dollar/Sweden SEK= 9.3029 9.3188 +0.01% -0.48% +9.3771 +9.2862
Euro/Sweden EURSEK= 10.4710 10.4699 +0.01% +0.02% +10.5007 +10.4467