© Reuters.

By Yasin Ebrahim

Investing.com – The dollar turned positive on Tuesday as fresh signs of a sharp rise in Covid-19 infections in the U.S. and other parts of the world prompted some safe-haven buying.

The , which measures the greenback against a trade-weighted basket of six major currencies, rose 0.36%, to 96.99.

A month after the U.S. begin lifting lockdown restrictions, some states have seen a sharp rise in Covid-19 infections, stoking fears about a second wave of the virus pandemic.

Texas reported that Covid-19 hospitalizations rose 8.3%, to 2,518 people, the highest number the state has seen since the pandemic began, while Florida for the second time this week set a daily record for new infections.

In Beijing, meanwhile, lockdowns were extended to 18 more residential communities following a fresh ‘extremely severe’ outbreak of the virus, according to local reports.

“The epidemic situation in the capital is extremely severe,” Beijing city spokesman Xu Hejian said at a press conference. “Right now we have to take strict measures to stop the spread of Covid-19.”

The rise in infections has stoked some concerns that lockdowns may return, potentially sparking a pullback in the risk assets, which would see likely see dollar demand return.

“Still, there are risks ahead, which have the potential to return the dollar’s role as a safe haven,” Action Economics said.  The threat of renewed lockdowns, which means that asset markets, many of which have returned to pre-pandemic levels, could “now be ripe for setbacks,” it added.

The dollar was also supported by a fall in the pound and euro.

fell 0.19% to $1.2578 and fell 0.55% $1.1260.  

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