Dollar eases amid U.S.-China tensions, coronavirus impact

The dollar was under pressure on Monday as the escalating U.S.-China tensions weighed on the market, while investors worried that the U.S. coronavirus resurgence could stall economic recovery.

The dollar fell to a four-month low on the yen and to a 22-month low of $1.1699 on the euro. The dollar index fell to its lowest level since September 2018.

The lack of support for the dollar is a significant change in the market sentiment as the U.S. currency led the safe-haven bid since the beginning of the coronavirus crisis.

The Aussie climbed to $0.7120 and the Kiwi gained 0.3% to $0.6657. However, both commodity currencies remained below recent peaks and eased against the yen.

Investors are beginning to worry about the U.S. political deadlock where Democrats and Republicans continued to debate over the coronavirus fiscal stimulus.

Last week a recovery in the U.S. job market stalled, while Europe’s economic recovery is gained ground, adding to worries about the slow decision on U.S. coronavirus stimulus.

The franc rose to a four-month peak of 0.9186 on the dollar, while the yen gained 0.4% to $105.65, its highest since March.