The U.S. dollar strengthened on Thursday as investors focused on poor Chinese retail sales instead of its stronger than expected economic growth last quarter, with the focus now shifting more to a European Union summit this weekend.

The European Central Bank meeting later in the day will most likely be overshadowed by the summit, at which European countries are expected to vote on a 750 billion euro recovery fund proposed by the European Commission to revive euro area growth.

The euro was last trading down 0.1% at $1.1401 EUR=EBS, though against the safe-haven Japanese yen, the dollar was trading neutral at 106.95 JPY=EBS.

The biggest mover was the British pound as it remained strongly correlated to risky assets, falling last by 0.3% to $1.2548 GBP=D3.

Surging U.S. virus cases dampened sentiment and weighed on equity markets, which in turn injected some strength in the U.S. dollar, a proxy for global risk sentiment.

“No one really wants to buy a lot more (equities) here because they’re concerned about a second wave of COVID, they’re concerned about the pace of corporate earnings deterioration,” said Stephen Gallo, European head of FX strategy at BMO Capital Markets.

“But equally, they don’t want to be massively short either because they know the central banks are active, and I think that’s probably one of the reasons why we’re doing this back and forth,” he added.

Simmering Sino-U.S. tensions also added to broadbased dollar strength.

U.S. President Donald Trump has not ruled out additional sanctions on top Chinese officials over Beijing’s crackdown on Hong Kong, a White House spokesman said on Tuesday.

The New York Times also reported his administration is considering a sweeping ban on travel to the United States by Chinese Communist Party members, citing four unnamed people with knowledge of such discussions.

China’s 3.2% economic growth last quarter easily beat market expectations for 2.5%. But an unexpected drop in retail sales – for a fifth straight month – was an unwelcome harbinger of possible problems ahead for the rest of the world as more countries relax lockdowns and allow businesses to reopen.

“The retail sales printing weak is showing that China doesn’t have much of a private consumption engine,” Gallo said.