Dollar Up Amid Rising COVID-19 Cases and Geopolitical Tensions

Investing.com – The dollar was up on Wednesday morning in Asia, boosted by fears over rising numbers of COVID-19 cases and geopolitical tension.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.07% to 97.002 by 11:57 PM ET (4:57 AM GMT) as investors turned to the safe-haven asset.

In China, the government is dealing with a surging second wave of COVID-19 cases stemming from a weekend outbreak at the Xinfadi market. The government closed schools in the city and upped its emergency level to level two on Wednesday.

China is also dealing with rising tensions with India, with clashes between India and China at a disputed border site leaving 20 Indian soldiers dead as well as an unspecified number of Chinese casualties.

The USD/CNY rose 0.11% to 7.0933.

In other parts of Asia, tensions between North and South Korea also intensified after North Korea blew up a joint liaison office on Tuesday and threatened to send troops to the DMZ.

“In Asia, there is a bit of risk-off mood following a renewed outbreak of coronavirus in Beijing and also some geopolitical tensions in the region,” Kyosuke Suzuki, Societe Generale (OTC:SCGLY) director of currencies, told Reuters.

Meanwhile, U.S. Federal Reserve Chairman Jerome Powell upheld a gloomy picture of U.S. economic recovery from COVID-19 on Tuesday, pouring cold water on optimism for a quick recovery.

The USD/JPY pair was down 0.04% to 107.28.

The AUD/USD pair was down 0.27% to 0.6865. The NZD/USD pair slid 0.09% to 0.6441, with New Zealand prime minister Jacinda Arden calling in the country’s military to enforce the country’s boarders after a re-emergence of COVID-19 cases in the country.

The GBP/USD pair lost 0.18% to 1.2551.

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