The U.S. dollar was roughly flat on Monday morning in North America, with trading volumes thin due to a holiday in Europe.
The dollar index, which measures the greenback against a basket of six rival currencies, was up 0.04%. Against the euro, the dollar was 0.35% stronger at $1.090. Though the U.S. currency had earlier drifted higher against the Australian and New Zealand dollars, as the weekend's OPEC+ deal failed to soothe demand concerns, those trends had mostly reversed in mid-morning trade.
"The U.S. dollar ticked higher in the holiday-light trade. Gains against the euro and commodity currencies provided a general boost to the greenback, which was otherwise weaker against the yen and sterling," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
Major oil producers agreed to the output cuts on Sunday to prop up oil markets as the pandemic severely curtailed global demand.
"Oil-exposed currencies were subdued despite OPEC's record production cuts of nearly 10 million barrels a day. The cartel hopes that the record agreement will help put a floor under oil prices. Still, the outlook remains troubled for oil markets given that the coronavirus has significantly damaged demand," said Manimbo.
Financial markets remain on edge over the spread of the novel coronavirus as severe restrictions on personal movement drag the global economy into a deep recession. However, a slower flow of news in the past few days has boosted risk assets modestly, and the dollar, which serves as a safe-haven asset, has drifted modestly lower.
The greenback has also been pressured in the last few weeks by Federal Reserve measures that have flooded the financial system with dollars to address a liquidity crunch caused in part by demand for the U.S. currency.
"The backdrop over the past week has been "no news is good news," which has boosted risk assets," said Mark McCormick, global head of foreign exchange strategy at TD Securities.
"We don't expect this dynamic to last much longer," said McCormick. "As we leave the acute phase of the crisis, the market will have to deal with the underlying data and the uncertainty of the CV-19 exit strategies. The latter will be piecemeal and bumpy. It's a dance of fits and starts rather than a binary event of economy on/off. In turn, we expect another bump in the USD."