* Dollar rises to one-week high
* Delta variant adds uncertainty to global recovery
* U.S. consumer confidence rises
* Graphic: World FX rates tmsnrt.rs/2RBWI5E
(Adds new comment, updates prices, changes byline, dateline;
previous LONDON)
By Gertrude Chavez-Dreyfuss and Saikat Chatterjee
NEW YORK/LONDON, June 29 (Reuters) - The U.S. dollar rose on
Tuesday to a one-week peak, on track for its largest single
daily gain in about two weeks, as new coronavirus outbreaks
threatened to derail a global economic recovery with the
Australian dollar and the British pound leading losses.
A decline in risk appetite benefits the dollar as a safe
haven.
Fears over the spread of the highly infectious Delta variant
of the virus are denting sentiment at a time markets are on edge
after the Federal Reserve shocked traders with a hawkish tilt
earlier this month.
Indonesia is grappling with record-high cases, while
Malaysia is set to extend a lockdown and Thailand has announced
new restrictions. Spain and Portugal are imposing travel
restrictions on unvaccinated British travellers.
"There is an extra layer of uncertainty in the global
recovery with economies like South Africa, Australia, and parts
of Asia with their lockdown restrictions because of the Delta
variant," said Simon Harvey, senior FX market analyst at Monex
Europe in London.
"We went from a certain and stable background in Q2 to a lot
more uncertainty going forward and markets have to price that,"
he added.
In late morning trading in New York, the dollar index
, a gauge of its value against six major rivals, rose 0.6%
to 92.124, on course for its biggest percentage gain since
mid-June.
The greenback's correlation with general risk appetite as
seen from the global daily case loads of COVID-19 has weakened
in recent weeks as market attention has been more focused on
when the Fed will exit its massive policy stimulus. But that
correlation has started to strengthen since last week.
The dollar also got a boost after data showed U.S. consumer
confidence increased in June to its highest level since the
COVID-19 pandemic started more than a year ago. That boosted
expectations for strong economic growth in the second quarter.
The euro declined 0.3% to $1.1892, edging back
toward the 2-1/2-month low of $1.1847 touched on June 18.
"The market had been positioned long of the single currency
on optimism regarding the vaccine catch-up trade in the region
(but) forecasts that the Delta variant of COVID could spread
through Europe (in) the summer months could now be undermining
confidence in this trade," Rabobank strategist Jane Foley wrote
in a report, cutting a one-month euro forecast to $1.19 from
$1.20.
Elsewhere, sterling slipped back toward a two-month
low, weakening 0.4% to $1.3825.
The Australian dollar, seen as a liquid proxy for
risk appetite, fell 0.6% to US$0.7520 amid concerns over renewed
COVID-19 lockdowns across parts of the country.
========================================================
Currency bid prices at 10:42AM (1442 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 92.0800 91.8670 +0.24% 2.333% +92.1940 +91.8520
Euro/Dollar $1.1896 $1.1923 -0.22% -2.63% +$1.1930 +$1.1878
Dollar/Yen 110.4850 110.6200 -0.12% +6.93% +110.7550 +110.4350
Euro/Yen 131.43 131.90 -0.36% +3.55% +131.9400 +131.2900
Dollar/Swiss 0.9215 0.9200 +0.17% +4.16% +0.9233 +0.9190
Sterling/Dollar $1.3824 $1.3880 -0.34% +1.25% +$1.3882 +$1.3814
Dollar/Canadian 1.2379 1.2342 +0.30% -2.79% +1.2396 +1.2333
Aussie/Dollar $0.7517 $0.7565 -0.62% -2.27% +$0.7570 +$0.7508
Euro/Swiss 1.0961 1.0964 -0.03% +1.43% +1.0972 +1.0956
Euro/Sterling 0.8604 0.8590 +0.16% -3.74% +0.8608 +0.8588
NZ $0.6988 $0.7042 -0.73% -2.65% +$0.7051 +$0.6980
Dollar/Dollar
Dollar/Norway 8.5645 8.5320 +0.36% -0.28% +8.5810 +8.5190
Euro/Norway 10.1891 10.1730 +0.16% -2.66% +10.2137 +10.1560
Dollar/Sweden 8.5406 8.5088 +0.07% +4.20% +8.5522 +8.5101
Euro/Sweden 10.1607 10.1536 +0.07% +0.84% +10.1707 +10.1417
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London; Editing by Steve Orlofsky and
Emelia Sithole-Matarise)
