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· Dollar edges lower amid uncertain US outlook

The dollar slipped on Tuesday, alternating between gains and losses, as markets digested less bearish comments from U.S. monetary officials along with a more dire prognosis from the country’s top medical expert on the spread of the novel coronavirus.

The dollar gained against the euro and the yen, but fell versus sterling, the Swiss franc, and commodity currencies such as the Australian, New Zealand and Canadian dollars.

Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, in testimony before the U.S. House of Representatives Financial Services Committee on Tuesday, suggested a willingness to do more for the U.S. economy as it battles the enormous fallout from the virus outbreak.

Mnuchin said he is working with the House and the Senate to pass more coronavirus relief by the end of July, while Powell said the Fed can lower the minimum loan threshold under the Main Street lending program in the future.

On the other hand, Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, in remarks to a Senate committee on Tuesday warned of the risks of a surge in cases and said the country should not bank on the availability of a safe and effective COVID-19 vaccine.

In early afternoon trading, the dollar index slipped to 97.380. For the quarter and month, the dollar fell 1.6% and nearly 1.0%, respectively. It was the worst monthly performance for the dollar since December.

“The dollar is consolidating right now,” said Marc Chandler, chief market strategist, at Bannockburn Forex in New York. “The upside on the dollar really began on June 10 and so I think we can see one more leg up in the dollar,” he said. “As we get into July, there is some uncertainty -- today for example is the last day of the PPP (payroll protection program) and at the end of next month is the end of the unemployment claims, unless it gets extended.”

There are concerns as well on the resurgence in U.S. coronavirus cases.

The United States saw a 46% increase in new cases of COVID-19 in the week ended June 28 compared with the previous seven days, with 21 states reporting positive test rates above the level that the World Health Organization has flagged as concerning.

In other currencies, the dollar gained 0.3% versus the yen, to 107.93 yen.

The euro inched lower against the dollar to $1.1234. It was earlier pressured by data showing underlying price pressures dropped again in the euro zone. Over the quarter, the euro staged a 1.6% comeback after falling by a similar margin during the first three months of the year. For the month of June, the euro was up 0.9%.

Traders said there remains a barrier of $1.1200 for the euro on the downside.

Sterling reversed losses against the dollar to trade up 0.2% at $1.2328.

The pound fell earlier after data showed the economy shrank by 2.2% between January and March, its worst performance since 1979, as households slashed spending.

· Dr. Anthony Fauci says U.S. coronavirus outbreak is ‘going to be very disturbing,’ could top 100,000 new cases a day

The U.S. is “not in total control” of the coronavirus pandemic and daily new cases could surpass 100,000 new infections per day if the outbreak continues on its current trend, White House health adviser Dr. Anthony Fauci said Tuesday.

“I can’t make an accurate prediction but it’s going to be very disturbing,” Fauci told senators in a hearing held by the Senate Health, Education, Labor and Pensions Committee.

The number of new cases reported each day in the U.S. is now outpacing that of April, when the virus rocked Washington state and parts of the Northeast, especially the New York City area.

· Texas reports record number of new coronavirus cases, extends ban on elective surgeries

Texas reported more than 6,900 new coronavirus cases Tuesday, a record daily increase that brings the state’s total to nearly 160,000 cases, according to the state’s department of health.

· Americans will remain barred from European travel as the EU gradually reopens its borders

Travelers from a list of 15 nations will be allowed entry to the European Union starting Wednesday, but the United States is not on the list.

Thirty countries in Europe (26 of which are members of the EU) closed their external borders in March to mitigate the spread of Covid-19. As most of them reopen their economies, they are also starting to welcome external visitors — though at a much slower rate than before the pandemic.

European Union governments decided Tuesday to open their external borders to Algeria, Tunisia, Australia, Canada, New Zealand, Georgia, Japan, Montenegro, Morocco, Rwanda, Serbia, South Korea, Thailand and Uruguay. Chinese travelers will also be allowed in the EU, but only if China announces that it will also accept European visitors.

The decision was taken based on the health situation of the countries of origin and will be reviewed every two weeks.

· Oil slips 1% on demand worries, but posts best quarter in nearly three decades

Oil prices slipped on Tuesday amid rising COVID-19 cases and a possible return of Libyan oil production, which has slowed to a trickle since the start of the year.

The more-active September contract for Brent fell 0.3% to $41.70 a barrel, paring Monday’s 92-cent gain. The August contract, which expires on Tuesday, fell 51 cents, or 1.2%, to $41.20.

West Texas Intermediate, the U.S. oil benchmark, slid 1.08%, or 43 cents, to settle at $39.27 per barrel.

Coronavirus cases continue to rise in southern and southwestern U.S. states. Northeastern states like New York and New Jersey doubled the number of states from which travelers face quarantine restrictions.

Reference: CNBC, Reuters