Early trade in New York: flat in thin trade with Europe on holiday

The US 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 US 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 US 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 US 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.