The US dollar experienced somewhat of a revival in forex markets and recouped some of its losses as the market sentiment deteriorated over concerns about rising number of fresh coronavirus cases around the world, especially in Canada and India. At the time of writing, the US dollar index DXY is trading around 91.25.

Investors made a rush towards the safety of the greenback, a move that also helped the safe haven currency Japanese yen strengthen to the highest level seen in seven weeks against the dollar. Meanwhile, the Euro remains supported by expectations that the rollout of the COVID-19 vaccines will help the European economy get back on its feet soon.

Despite the recent gains, the US dollar has lost around 2.2% of its value so far this month against its leading rivals on account of a decline in US Treasury yields. As fears of inflation heating up on rapid economic recovery across the US diminished following repeated reassurances by Fed officials, bond yields eased lower, dragging the reserve currency down with them.

The US dollar is likely to experience volatility driven by the market sentiment in the near term, especially on the back of a resurgence in the pandemic in key markets across the world. A weakness in US equity markets during the previous session has also contributed to gains in the greenback for now.