The U.S. dollar firmed up against its peers on Monday on safe-haven appeal due to worries about growth due to surging coronavirus cases and tighter restrictions on movements into the U.S. from several European countries.
Disappointing economic data from Germany, and worries over vaccine supply delays also lifted dollar’s safe-haven appeal.
Survey results from the ifo institute said German business confidence weakened in January. The business confidence index fell to 90.1 in January from revised 92.2 in the previous month. The score was forecast to drop moderately to 91.8.
Current assessment as well as expectations deteriorated in January. The current assessment index slid to 89.2, which was below the expected reading of 90.6. Likewise, the expectations index decreased to 91.1, which was also below the consensus forecast of 93.2.
With coronavirus cases looking on course to hit the 100 million mark worldwide, several countries are reimposing lockdown restrictions. The French government is likely to impose a third lockdown in the coming days to combat coronavirus in the country.
U.S. President Joe Biden is set to impose a ban on non-U.S. citizens from the U.K., Ireland and 26 other countries in Europe. Travelers from Brazil and South Africa will also be barred from entering the U.S. following detection of new virus variants in those countries.
Markets are also looking ahead to the Federal Reserve’s monetary policy, due on Wednesday.
The dollar index, which rose to 90.52 a little before noon, gave up some gains as the session progressed, but was still holding in positive territory at 90.38, gaining 0.16% over previous close.
Against the Euro, the dollar was stronger by about 0.26% at $1.2143, despite easing from $1.2117.
The Pound Sterling was weaker, fetching $1.3669 a unit, less than $1.3685 on Friday evening.
The Yen was flat at 103.77 a dollar, after having weakened to 103.93 earlier in the day.
Against the Aussie, the dollar was little changed, with the AUD-USD pair at 0.7711.
The Swiss franc was down at CHF 0.8881, sliding from CHF 0.8856 a session earlier, while the Loonie was down nearly 0.1% at C$ 1.2745.
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