NEW YORK (Reuters) - The dollar hit a four-month high against the euro on Monday as concerns about the coronavirus boosted demand for safe havens, while a bullish outlook for the U.S. economy and weak data in the eurozone made the greenback more attractive than the single currency.
As of 0500 GMT on Monday, there had been 40,235 confirmed cases reported in China and 909 deaths from the virus, as well as 319 cases in 24 other countries, including one death.
Investors fear the spreading virus will dent the global economic outlook.
Relatively strong economic data in the United States is also making the greenback more attractive. Data on Friday showed that U.S. job growth accelerated in January.
By contrast, German industrial output recorded its biggest fall in December since the recession-hit year of 2009, data on Friday showed. Data on Monday also revealed that Italian industrial output was much weaker than expected in December.
“We had much stronger-than-expected U.S. data, coupled with much weaker-than-expected eurozone data,” said Win Thin, global head of currency strategy at Brown Brothers Harriman in New York.
At the same time, “we have the safe-haven bid from the coronavirus. That is killing EM and really benefiting the dollar, and to a lesser extent the yen and Swiss,” Thin said.
Political uncertainty in Germany is an additional headwind for the euro.
Annegret Kramp-Karrenbauer, leader of Chancellor Angela Merkel’s Christian Democrats, on Monday confirmed she would not run for chancellor in next year’s federal election but added that she would remain party chair until another candidate is found.
The Australian dollar AUD= sank to $0.6656, the lowest since 2009, before rebounding to $0.6679. Australia’s economy tied closely to China’s.
Reporting by Karen Brettell; Editing by Dan Grebler
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