FOREX-Dollar struggles to stem decline as investors fret over U.S. job recovery

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

By Hideyuki Sano
TOKYO, Aug 6 (Reuters) - The dollar struggled to stem its
broad decline on Thursday as investors worried the U.S. economic
recovery may lag other countries due to a high level of
coronavirus infections while the global economy slowly gets back
on its feet.
The dollar's index against a basket of currencies =USD
edged down 0.1% to 92.719, having fallen more than 0.5% in the
previous session to approach its two-year low of 92.539 marked
last Friday.
"Dollar-selling seems to have resumed. We are having the
same structure we saw in July," said Shinichiro Kadota, senior
strategist at Barclays.
Decline in the U.S. currency has gathered pace since late
July on rising perception that U.S. economic recovery could be
hobbled by the country's poor performance in containing the
COVID-19 outbreak.
The euro changed hands at $1.1874 EUR= , having gained 0.5%
in the previous day's trade to stand just below Friday's
two-year high of $1.1908, extending its bull run since European
leaders agreed on a recovery fund on July 21.
The common currency held an upper hand against the yen,
trading at 125.27 yen EURJPY=R , having hit its highest level
since April last year in the previous session.
The U.S. currency traded at 105.52 yen JPY= , having eased
a tad in the past two days.
The dollar extended losses on Wednesday after the ADP
National Employment Report showed U.S. private payrolls growth
slowed sharply in July, suggesting the labour market recovery
was faltering. U.S. services industry activity gained momentum in July as
new orders jumped to a record high, but hiring declined, a
separate survey by the Institute for Supply Management (ISM)
also showed. "Although the headline figure from the survey was strong,
the employment component while ADP data was weak. These point to
downside risks to Friday's payroll data," said Kadota at
Barclays.
With more than 30 million people on jobless benefits,
recovery in employment is seen as critical to the U.S. economic
outlook, with many investors counting on another fiscal stimulus
to support the economy.
Top congressional Democrats and White House officials
appeared to harden their stances on new coronavirus relief
legislation, however, as negotiations headed toward an
end-of-week deadline with no sign of an agreement. Sterling also edged near Friday's 4-1/2-month high of
$1.3170, last quoted at $1.3137 GBP=D4 .
The Bank of England looks set to hold off from taking
further action at its policy review later in the day, by keeping
its benchmark interest rate at an all-time low of 0.1% and its
bond-buying stimulus programme unchanged at 745 billion pounds
($980 billion).
The U.S. dollar sank to its lowest level in almost half a
year against the Canadian dollar to C$1.3262 CAD=D4 .
The offshore Chinese yuan traded at 6.9423 per dollar
CNH= , having hit a five-month of 6.9324 on Wednesday.
Gold was by far the best performer, hitting a record high of
$2,055.3 per ounce XAU= overnight and last stood at $2,039.5,
supported by demand for hedge against the dollar's decline.