Dollar takes a breather on renewed coronavirus worries

The dollar steadied on Monday after a recent drop as new worries about the coronavirus pandemic and the global economy urged investors to cling on to the safe-haven currency.

The dollar index was flat at 90.172. It rebounded on Friday after reaching 90.043 on Thursday, its weakest level last week.

Analysts say the dollar could resume its drop if the Fed reaffirms a highly dovish policy at its meeting later this week. 

The euro steadied at $1.2174, pausing after climbing 0.8% last week. Gains for the common currency was capped by signs of political instability in Rome. 

Economic activity in the euro zone fell in January as strict lockdowns to contain the new COVID-19 strain hit the bloc’s dominant service industry. 

Elsewhere, the pound firmed at $1.3684, just below a 2 ½-year high of $1.3745 hit on Thursday amid vaccine rollouts in Britain.

The dollar was flat at 103.76 against the Japanese yen.