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Dollar Rebounds On Safe-haven Demand

The U.S. dollar gained in strength on Thursday on safe-haven demand after several states across America reported sharp increases in coronavirus cases on Wednesday.

According to reports, more than 60,000 new Covid-19 cases were reported on Wednesday, the biggest increase ever reported by a country in a single day. Florida reported a record increase in hospitalizations.

With Covid-19 cases on the rise in 42 states across the United States, investors fear that re-imposition of lockdown measures will significantly weaken recovery chances.

The dollar index rose to 96.81, gaining about 0.4%, after having lost ground against most of its rivals a day earlier.

Against the Euro, the dollar firmed up to $1.1283 from Wednesday's close of $1.1330.

The Pound Sterling was little changed at $1.2607 in late afternoon trades, after quoting at $1.2670 in the European session.

Against the Yen, the dollar was slightly weak with a unit of greenback fetching 107.19 yen, against previous close of 107.26 yen. The Bank of Japan has downgraded economic assessment of all nine regions for the second straight time, citing the impact of the novel coronavirus, or Covid-19.

According to the latest quarterly Regional Economic Report, released on Thursday, all nine regions namely Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku, Kyushu- Okinawa reported that their economy had either deteriorated or had been in a severe situation.

Against the Aussie, the dollar was up at 0.6964, gaining from overnight 0.6982.

Against Swiss franc, the dollar was stronger, fetching CHF 0.9405 a unit, about 0.23% more than yesterday's close of CHF 0.9383.

The Loonie was weak as well against the greenback, trading at C$1.3581 a dollar, easing from C$1.3512.

In U.S. economic news, first-time claims for U.S. unemployment benefits declined by more than anticipated in the week ended July 4th, according to a report released by the Labor Department.

The report said initial jobless claims tumbled to 1.314 million, a decrease of 99,000 from the previous week's revised level of 1.413 million. Economists had expected jobless claims to slump to 1.375 million from the 1.427 million originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also fell to 1,437,250, a decrease of 63,000 from the previous week's revised average of 1,500,250.

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