By Gina Lee
Investing.com – The dollar was up on Friday, with the U.S. reporting more than 2 million COVID-19 cases as of June 12 and triggering renewed fears of a second wave of cases.
Investors were also spooked by the possibility of renewed lockdowns to curb the spread.
The market was still digesting a grim picture of the U.S. economic recovery painted by the U.S. Federal Reserve after it concluded its policy meeting on Wednesday.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.11% to 96.850 by 11:40 PM ET (4:40 AM GMT), with investors turning to the safe-haven asset as stocks tumbled.
But some investors suggested that factors other than the Fed’s grim analysis contributed to stocks’ losses from its recent rally.
"It is almost mudslinging to blame the stock falls on the Fed's dour assessment. Most market players have acknowledged that the stock rally has been driven by excess liquidity and the Fed's accommodative stance is unlikely to push stocks lower," Makoto Noji, chief currency strategist at SMBC Nikko Securities, told Reuters.
"In short, it was a correction from an overbought market, which should not last long. But what we should be careful is that the market's fall could continue if we have more bad news from China and Europe for instance."
There are almost 7.5 million cases worldwide according to Johns Hopkins University data.
The USD/JPY pair was up 0.13% to 106.98, reversing its earlier losses.
The AUD/USD pair slid 0.36% to 0.6829 and the NZD/USD pair was down 0.31% to 0.6410.
The USD/CNY pair was up 0.31 % to 7.0856 and the GBP/USD pair was down 0.28% to 1.2565.