The euro dropped back towards $1.08 today and the Australian dollar tumbled to a new 11-year low as the rapid spread of the coronavirus outside China drove fears of a pandemic and sent investors to the safety of the US dollar. 

The safe-haven Japanese yen and Swiss franc were little moved, however.

This underlines how the dollar has become the currency of choice for worried investors because the US economy is seen as the most sheltered should the virus damage the global economy. 

Italy, South Korea and Iran posted sharp rises in infections over the weekend. South Korea now has more than 760 cases, Italy more than 150 and Iran 43 cases. 

The World Health Organization is now worried about the growing number of cases that have no clear link to the epicentre of the outbreak in China. 

The euro weakened 0.3% to $1.0805, close to last week's level of $1.0778 - a nearly three-year low.

The dollar index gained 0.1% to 99.562, remaining close to its highs of 99.915 touched last week. 

The Australian dollar, often traded as a proxy for China risk because Australian exporters depend heavily on Chinese demand, weakened 0.5% to a new 11-year low of $0.6585. 

Currencies closely linked to global growth and commodity prices were also sent lower, with the Swedish crown and Canadian dollar down sharply.