Dollar holds near six-week peak as stock selloff subsides

The dollar held on to sharp gains on Tuesday after coronavirus fears and worries about delays in U.S. stimulus prompted a sell-off in almost all the financial markets.

The dollar stood at 93.519 against a basket of currencies, just below a six-week peak hit on Monday. The safe-haven yen rose to 104.57 on the dollar after recently falling from a six-month high. 

The Aussie recovered from a dip and steadied at $0.7223 after a senior central banker said that negative rates were considered as a policy option.

Stock market selling, which was prompted by a dirty-money scandal with two of the world’s largest banks, started to moderate in Asian trade.

Futures were mixed, with small gains for European markets and brief declines for United States markets.

Oil-related currencies Norwegian krone and Canadian dollar sat near multi-lows as oil prices nursed losses.

Meanwhile, investors are worried that rising coronavirus cases in Europe and weakening enthusiasm for U.S. stimulus could stall global recovery from the pandemic.

The euro traded at $1.1768 in Asian trade, while the pound sat at $1.2822 amid speculations of renewed restrictions due to rising COVID-19 cases.

Monday’s mini-meltdown that led the Japanese yen to lose earlier gains and fall from a six-month high was the biggest confounding factor for forex traders. The yen has been among the best performing majors this month amid safe-haven demand.

The Chinese yuan rose to 0.1% to $6.7880, suggesting that pressure could soon return to the dollar.