The U.S. dollar fell across the board on Friday, on pace for its worst weekly loss in four years, as a sharp drop in U.S. government bond yields hurt the greenback's appeal.

The dollar index, which measures the greenback's strength against a basket of six other major currencies, was about 0.8% lower at 95.883, its lowest in about a year. For the week, the index was down 2.4%, its worst weekly performance since early February 2016. The euro climbed about 0.8% to an eight-month high of 1.1328. Against the Japanese yen, the dollar was down 0.9% at 105.19 yen, a more than six-month low.

Investors have slashed their expectations for U.S. interest rates after an emergency Federal Reserve rate cut of 50 basis points earlier this week to counter the economic fallout from the spreading coronavirus.

Worries about the virus have left market fundamentals in the dust, and the 10-year note yield sank to a record low on Friday. That is wiping out the yield advantage that had fueled a popular carry globally - borrowing at negative rates in the euro and yen to buy U.S. assets. Markets now bet the Fed will again cut rates by 50 basis points this month.

Source : Reuters