The US dollar remains strong on Tuesday, as increased concerns about the spread of the deadly coronavirus in China stimulate demand for safe-haven currencies.
The pair USD/JPY is trading 0.2% higher and is at 109.08, dropping to a minimum of 108.83.
Futures on the US dollar index, which tracks the exchange rate of the US currency against a basket of other currencies, rose 0.1% to 97.81 and approached the levels that were last observed in early December.
The pair EUR/USD was trading at 1.1019.
The positive tone around the dollar, in combination with global concerns about growth amid the spread of the Chinese virus, has recently kept the EUR/USD pair under strong pressure.
“The pair remains under pressure, although off Monday’s year-to-date lows near the psychological 1.10 mark,” said analysts at FXStreet. “Dynamics around the dollar are expected to remain the exclusive driver of the pair’s price action for the time being along with alternating risk appetite trends in response to developments from the coronavirus.”
Given this, attention is likely to draw to the start of the Federal Reserve’s two-day rate-setting meeting on Tuesday, as well as the latest data released in the US.
The pound sterling was also weaker in early Tuesday in Europe, amid concerns that the country will not be able to reach a trade deal with the EU by the end of the post-Brexit transition period at the end of the year. GBP/USD and GBP/EUR were both around 0.2% lower.