Dollar snaps losing streak in Europe

The dollar snapped a week of declines on Monday and rallied against major currencies and riskier emerging markets as investors braced for prolonged uncertainty and governments tightened lockdowns to fight the coronavirus.
China's offshore yuan fell after the Chinese central bank cut a key interbank interest rate.
The euro, sterling and Aussie dollar were all down 0.5% to 1% in London trading, bringing an end to recent rebounds that followed the Federal Reserve's efforts to calm the rush to own the US currency earlier this month.
Concern about the spreading coronavirus and the economic impact of shutdowns continued to dominate foreign exchange markets, but price moves on Monday were relatively well-contained and much smaller than in recent sessions.
"I think you have to say that risk is still high," said Adam Cole, a currencies strategist at RBC Capital Markets.
"The underlying newsflow out of China has been a lot better, in Italy it has improved ... but that's not the case in the UK and certainly not the case in the US"
He said markets needed to see "broader evidence of a peak in infections" before calm returned and otherwise risked more "brutal selloffs periodically".
The dollar index rose as much as 0.7% to 98.992, putting it back at Friday's trading levels.
Analysts said investors' end-of-month portfolio rebalancing as well as nervousness about the virus was also supporting the dollar.
The euro dropped 0.6% to $1.1069. Sterling weakened as much as 1% to $1.2318 before rebounding above $1.24.
Over the past two weeks, the dollar first posted its biggest weekly rise since the 2008 financial crisis as investors and companies rushed into the world's most liquid currency, then saw its biggest weekly drop since 2009. Signs of funding stress have eased but not abated and hard-dollar cash remains in high demand.
"The magnitude and breadth of US dollar gains suggest that financial markets have become seriously impaired. So the US DOLLAR may now become a barometer of the efficacy of the policy response to corporate credit difficulties, interbank funding challenges, etc," Standard Chartered analysts said in a research note.
The safe-haven Japanese yen rose marginally to 107.87 yen per dollar.
Total global deaths from the virus are around 34,000 and the United States has emerged as the latest epicentre, with more than 141,000 confirmed cases and 2,400 deaths.
The dollar gained 0.4% versus the offshore Chinese yuan to 7.1132 after the People's Bank of China unexpectedly cut a key interbank interest rate, the seven-day reverse repurchase rate, by 20 basis points.
The Australian dollar dropped sharply before recovering to trade down 0.5% at $0.6141.
The oil-exposed Norwegian crown fell along with declining oil prices, as did the Canadian dollar. The rand crumbled to a record low after Moody's cut South Africa's credit rating.