SINGAPORE:The U.S. dollar rose on Monday, boosted by safe-haven flows as risk appetite waned amid fears that last year's U.S.-China dispute will be reignited, this time over the novel coronavirus.

U.S. President Donald Trump and Secretary of State Mike Pompeo have pinned the blame for the pandemic on China, where the new coronavirus outbreak is believed to have originated.

The latest salvo came from Pompeo on Sunday, who said there was "a significant amount of evidence" that the virus emerged from a laboratory in the central Chinese city of Wuhan. 

"The dollar is outperforming and it's on the back of the risk-off sentiment stemming from U.S.-China tensions," said Ed Moya, senior market analyst at OANDA in New York.

In late morning trading, the dollar index was up 0.3% at 99.511 =USD , rising for a second straight day.

The dollar extended gains after data showed new orders for U.S.-made goods fell more than expected in March, dropping 10.3%. Economists polled by Reuters had forecast factory orders tumbling 9.7% in March. 

The euro fell 0.6% to $1.0913, while sterling slid 0.3% to $1.244 .

"Many investors are getting skeptical about the rebound we saw in risk appetite since the March 23rd low in stocks," OANDA's Moya said. "You'll see investors become extremely conservative and we'll see a steady stream of safe-haven flows, which should benefit the dollar."

The biggest move in the currency markets was the Chinese yuan, which fell to a six-week low of 7.1555 against the dollar in the offshore market. The dollar was last little changed at 7.1334, but if the yuan falls again, the next levels to watch would be the mid-March low of 7.1651 and early-September low of 7.1975.

Analysts were debating how the United States might attack China again - with more trade tariffs or even canceling the payments on U.S. Treasuries that China owns - but they all agreed the dollar/yuan cross would see higher volatility.

"A re-escalation in U.S.-China trade tensions has the potential to bring an end to the relative stability in USD/CNY," said Lee Hardman, a forex strategist at MUFG.

The moves extended a dour start for May, which began with Friday's bleak U.S. data and the threat of a fresh trade-war between the world's two biggest economies.

Pompeo did not provide evidence, or dispute a U.S. intelligence conclusion that the virus was not manmade. But the comments double down on Washington's pressure on China as U.S. deaths and economic damage mount.

The dollar was modestly up against the yen, another safe-haven currency, trading 0.1% higher at 106.965 yen.

With signs pointing to a stronger dollar, speculators cut slightly their net short positions on the U.S. currency against G10 currencies to $9.39 billion in the week to April 28 from $10.67 billion in the week prior to that, when they reached a near two-year high

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Olga Cotaga in London; Editing by Jonathan Oatis) ((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters Messaging: rm://gertrude.chavez.reuters.com@reuters.net))