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The dollar fell Tuesday after rallying the day before as investors fled to the safe-haven currency amid concerns about China’s COVID flare-ups.

The euro was up 0.3011% at $1.0265 after losing 0.8% on Monday, the sterling was up 0.46% to $1.187, partially reversing its 0.6% loss, and the dollar was down 0.6% at 141.86 yen after gaining 1.2%.

On Monday, dollar flows increased as Beijing warned that it was facing its severe test of the COVID-19 pandemic, with a surge in COVID cases prompting new restrictions. For the first time since May, the virus claimed the lives of people in the capital. The European Central Bank reported on Tuesday that the eurozone’s current account deficit shrank in September. A fresh bout of risk aversion against China hit the Antipodean currency, often used as a liquidity gauge for the Chinese renminbi, as the Australian dollar fell nearly 1 percent on Monday. On Tuesday, it recovered some of its losses, rising 0.5% to $0.6639. However, the trend continued further from China, with the dollar falling 0.4311% against the Swiss franc to 0.95512, reversing a similar gain the day before.

Bitcoin fell to $15,4791 on Monday, another victim of Monday’s rush to the dollar, amid concerns about cryptocurrency broker Genesis’s health.

The European Central Bank will continue to tighten policy, raising its deposit rate by 50 basis points next month as it fears that rapid price growth is becoming entrenched.

Inflation in the region rose to 10.6% last month, more than five times the ECB’s 2.0% target, due to rising energy prices following Russia’s invasion of Ukraine and disruption of supply chains.

GDP should fall 0.4% this quarter and 0.4% next year, meeting the technical definition of recession. The economy was then expected to grow by 0.1% in the second quarter and 0.3001% in the following 3 quarters, little changed from October forecasts.

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