Reuters News:

The dollar tumbled to an almost two-year low against the euro on Monday on concerns about the growing number of coronavirus cases in the United States and ahead of the Federal Reserve’s meeting this week when it is expected to confirm its commitment to rock-bottom interest rates.

“It seems like we’re seeing the dollar lose its crown,” said Edward Moya, senior market analyst at OANDA in New York. “There are high expectations you’re going to see the Fed continue to signal that they’re prepared to do more at a longer run, and the U.S. economic recovery is not going to be anywhere near as smooth as what is unfolding in Europe.”

Florida on Sunday became the state with the second highest number of total coronavirus cases, just behind California and becoming the second state to overtake New York, which was the worst-hit state at the start of the U.S. novel coronavirus outbreak, according to a Reuters tally.

U.S. Treasury Secretary Steve Mnuchin said on Sunday that Republican coronavirus relief legislation will be made public on Monday and he believes the party can move quickly with Democrats to hammer out their differences.

The Fed is expected to reiterate that it will keep rates near zero for years to come when it concludes its two-day policy meeting on Wednesday. Investors will be watching to see if the U.S. central bank indicates that it will increase its purchases of longer-dated debt and whether yield caps are likely going forward.

The euro was last up 0.79% at $1.1726, after earlier reaching $1.1781, the highest level since September 2018.

The single currency may extend gains to $1.20 if the region is able to contain any resurgences of the coronavirus, Moya said.

The dollar index fell 0.72% to 93.68. It earlier dipped to 93.47, the lowest since June 2018.

A broad measure of dollar positioning on Friday showed that net short positions in the greenback last week rose to the highest level since April 2018.

The safe-haven Japanese yen gained on the concerns about deteriorating U.S.-China relations. Tensions rose after Washington last week ordered China’s consulate in Houston to close, prompting Beijing to shutter the U.S. consulate in Chengdu.

The dollar fell 0.66% to 105.42 yen, after earlier dropping to 105.13, the weakest since March 13.

Sterling gained to a more than four-month high on Monday, driven by dollar weakness and as uncertainty over Brexit and Britain’s economic prospects kept most investors on the sidelines.

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