Early on Monday, the US dollar has strengthened to trade close to the highest level seen in three weeks as a result of a risk-off mood in markets amid rising fears about a possible second wave of coronavirus across the world. At the time of writing, the US dollar index DXY is trading around 97.66.

The safe haven appeal of the US dollar is back in focus even as commodity currencies trade lower as countries like China and Australia reimpose lockdown restrictions to contain the fresh spread of infections across Beijing and Victoria respectively. In the US as well, Apple announced the closure of 11 of its stores as the number of cases and hospitalizations climbed to record highs.

Other major currencies like the Euro, GBP and the Japanese yen are holding steady against the US dollar for now as markets await fresh economic data releases for cues on movement. This week’s focus is likely to be on PMI releases from several countries which could signal any change in economic activity after the lockdown measures were eased recently.

Later this week, the US dollar could see some moves on the release of the consumer sentiment figures which would reveal the extent of recovery in the economy which reopened recently. Net short bets on the greenback rose to the highest level since 2018, indicating a sense of optimism among investors about economic recovery following the pandemic.