SINGAPORELONDON, Nov 21 Reuters The U.S. dollar was firmly higher against major currencies on Monday, as rising COVID19 cases in China led to new restrictions there and weighed on global investor sentiment.

China is battling numerous COVID flare ups. Two deaths were reported in Beijing on Sunday, and the city39;s most populous district urged residents to stay at home on Monday.

The new cases have cast doubt on hopes that the government could soon ease its tough restrictions. That has boosted the dollar, which is seen as a safe haven in times of global economic stress.

The dollar was up 0.5 against Japan39;s yen at 141.07, its highest since Nov. 11. Meanwhile the euro was 0.62 lower against the greenback at 1.026.

The outlook for China39;s zeroCOVID market will remain a key source of volatility, said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

If we do see another set of step up in restrictions, it indicates to me that the Chinese officials are still wary of any eventual reopening.

The greenback was also rebounding somewhat after a sharp fall in recent weeks, analysts at Commerzbank said in a research note.

The dollar index , which tracks the currency against major peers, has slid more than 6 from a 20year high in October. A fall in the U.S. inflation rate last month has driven bets that the U.S. Federal Reserve will slow down its interest rate hikes.

However, the index remained around 12 higher for the year on Monday. The Fed39;s…