SINGAPORE, March 30 — The dollar slowed its descent after a week of declines and the safe-haven yen edged ahead today, as coronavirus lockdowns tightened across the world and investors braced for a prolonged period of uncertainty.

In bumpy trade the dollar ran ahead early before settling back against the pound, euro, kiwi and the Australian dollar. Sterling was last 0.1 per cent softer at US$1.2449 (RM5.37), the Aussie flat at US$0.6158 and the euro stable at US$1.1132.

“After all, the dollar is a safe-haven currency,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney. “It’s reflecting caution, and an uncertain market where you’re seeing a lot of illiquidity.”

The weekend brought more bad news on the virus front. The US has emerged as the latest epicentre of the outbreak, with more than 137,000 cases and 2,400 deaths.

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President Donald Trump, who had talked about reopening the economy for Easter, yesterday extended guidelines for social restrictions to April 30 and said the peak of the death rate could be two weeks away.

Australia also ratcheted up control measures, while an extension to lockdowns in Italy looms.

The halt in the dollar’s slide came with a broader risk-averse mood, which lifted the Japanese yen 0.4 per cent to 107.47 per dollar.

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The moves come after the dollar has surged amid a scramble for cash and then subsided as central bank launched unprecedented liquidity measures.

Over the past two weeks the dollar has posted its biggest weekly rise since the 2008 financial crisis and then its biggest weekly drop since 2009. Yet as signs of funding stress have eased, but not abated, the dollar remains at elevated levels.

“Risk aversion has been more important to the direction of the dollar than traditional interest rate differentials,” Standard Chartered analysts said in note.

“For the dollar to surrender some of its recent gains, investors would need to shift their preferences back to a broader basket of safe-haven assets.”

Today's moves showed some hints of that, since dollar gains were modest and in tandem with rises in gold, bonds and the yen.

Yields at the very short end of the US curve dipped into negative territory and futures for 10-year notes implied a 0.54 per cent yield, some 20 basis points below Friday’s close of the underlying Treasuries. Gold rose 0.5 per cent.

Against a basket of currencies, the dollar was steady at 98.312. It edged ahead against the Chinese yuan in offshore trade to 7.0800 per dollar. — Reuters