The dollar fell on Thursday as Treasury yields continued to plumb new lows and investors bet the Federal Reserve would cut interest rates to offset the impact of the spreading coronavirus, lifting the euro to its highest in more than three weeks.

Money markets are now fully pricing in one 25 basis point cut in U.S. interest rates by April and three by March 2021. Expectations for a European Central Bank rate cut have also risen; money markets now price a more than 80% chance of a 10 basis point rate cut in July.

Against the euro, the dollar fell to a three-week low, last down 1.14% to 1.100. The dollar index dropped 0.76% to 98.358, its weakest since Feb. 6.

The dollar dropped 0.58% to 109.77 Japanese yen as the yen's safe-haven appeal began to return.

Source : Reuters