Investing.com – The dollar reversed its small earlier gains on Monday morning, with investors facing the possibility of renewed lockdowns as COVID-19 cases spiked over the weekend.
Sunday saw a record of 183,020 cases globally according to the World Health Organization, with fears of a second wave of cases and a return of restriction measures to curb the number of cases.
The number of global cases is almost 9 million, according to Johns Hopkins University data.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.06% to 97.523 by 11:23 PM ET (4:23 AM GMT). Investors initially turned to the safe-haven asset, helping it reach a three-week high, as their risk appetite decreased, before starting a retreat.
The USD/JPY pair gained 0.02% to 106.89.
The AUD/USD pair gained 0.38% to 0.6858 and the NZD/USD pair was up 0.23% to 0.6420, with the AUD reversing its earlier retreat. Australia’s second-largest state, Victoria, re-imposed some restrictions with a spike of cases over the weekend.
Meanwhile, the Reserve Bank of New Zealand will announce its latest benchmark interest rates settings on Wednesday. The central bank is widely expected to keep rates at 0.25%, but investors will be looking for any mention of future negative rates, as well as the tone of the announcement.
The USD/CNY pair gained 0.10% to 7.0777. China said earlier in the day that it would leave its benchmark lending rate steady.
The GBP/USD pair gained 0.16% to 1.2376.
Some investors expected sentiment to be risk-averse for the coming week.
“It won’t take much for the market to see this as a liquidity headwind...and when we mix in rising concerns around a renewed COVID crisis then it may keep risk on the back foot this week,” Chris Weston, head of research at Pepperstone, told CNBC.