FOREX-Dollar on defensive as upbeat data dulls safe-haven appeal

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

By Hideyuki Sano
TOKYO, July 2 (Reuters) - The dollar was on the defensive
against more growth-sensitive currencies on Thursday, following
upbeat U.S. and European economic data but renewed worries about
the coronavirus blunted more aggressive risk taking.
The market sentiment gained an additional boost from the
news that a COVID-19 vaccine developed by German biotech firm
BioNTech BNTX.O and U.S. pharmaceutical giant Pfizer PFE.N
has shown potential and was found to be well tolerated in
early-stage human trials. Sterling traded at $1.2477 GBP=D4 , flat in early Thursday
trade but having gained 1.1% so far this week. The Australian
dollar fetched $0.6919 AUD=D4 , having gained 0.7% on the week.
The euro changed hands at $1.1252 EUR= , maintaining its
gain of 0.3% since the start of week.
The U.S. manufacturing activity rebounded more than expected
in June, with the manufacturing activity index by the Institute
for Supply Management (ISM) hitting its highest in 14 months as
firms and businesses resumed operations. Similar surveys from China, Germany and France all pointed
to a recovery in factory activity while the ADP National
Employment Report showed June private payrolls increased 2.369
million jobs.
Data for May was revised upward to show payrolls surging
3.065 million, instead of tumbling 2.76 million as previously
estimated.
More closely watched jobs reports from the government, due
later in the day ahead of U.S. public holiday on Friday, are
expected to show an increase of 3 million non-farm payrolls in
June.
There are concerns about whether the U.S. economy can
sustain its recovery as coronavirus infections surge in many
parts of the United States.
California dramatically rolled back efforts to reopen its
economy on Wednesday, banning indoor restaurant dining in much
of the state, closing bars and stepping up enforcement of social
distancing and other measures as COVID-19 infections
surge. Against the yen, the dollar traded at 107.45 yen JPY= ,
having fallen 0.4% the previous day as it was unable to recover
losses made in Asian trade on safe-haven bids.
"If we see further spikes in coronavirus cases, I would
expect both the dollar and the yen to strengthen against other
currencies," said Tohru Sasaki, head of Japan market research at
J.P. Morgan.