By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - The dollar climbed from a four-week low on Thursday, as a decline in U.S. stocks enhanced the currency's safe-haven appeal for investors following a surge in new coronavirus cases and a U.S. Supreme Court ruling on President Donald Trump's financial records.
The euro fell from a one-month high versus the dollar, while commodity currencies, which tend to rise when risk appetite increases, also slid against the greenback.
The dollar rally coincided with the Supreme Court ruling on Thursday that a New York prosecutor can obtain Trump's financial records, analysts said. But it did prevent, for now, the Democratic-led House of Representatives from obtaining the same records.
"The dollar over the last few weeks has been trading on risk-taking levels and taken on its role as a safe haven," said Ronald Simpson, managing director, global currency analysis at Action Economics in Florida.
"The Supreme Court ruling had a big impact on everything: the dollar rose, (Treasury) yields fell, and stocks got slammed. It puts some risk on Trump right now that something bad may come out," he added.
Earlier in the global session, the dollar struggled, with the Chinese yuan climbing to a four-month peak, as investors increased positions in Chinese stocks on growing signs of a recovery in the world's second-largest economy.
Market sentiment turned, however, during the U.S. session. Another contributing factor, apart from the Supreme Court decision, was the renewed surge in COVID cases.
More than 60,000 new COVID-19 infections were reported on Wednesday, the greatest single-day tally of cases by any country since the virus emerged late last year in China. U.S. deaths rose by more than 900 for the second straight day.
U.S. stocks ended mixed on Thursday, with the Nasdaq hitting another record closing high. The dollar continues to move inversely to stocks and risk appetite.
Analysts believed though that despite losses in the S&P 500 <.SPX> and the Dow Jones index <.DJI>, stocks should remain well-supported on dips.
"The risk backdrop should remain more or less positive for the foreseeable future, given the global fiscal and monetary policy setting," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.
In late afternoon trading, the dollar index rose 0.4% to 96.816 <=USD>, after falling to a four-week low of 96.233.
The euro dropped 0.4% to $1.1279, sliding after hitting a one-month high around $1.1371 hit earlier in the day
The Chinese yuan soared to a four-month high of 6.9808 in the offshore market and was last little changed against the dollar at 6.9968
The dollar was flat against the yen at 107.20 yen
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci, Richard Chang and David Gregorio)