Let us check the market. Past March 18, the yuan has reached its highest levels against the United States dollar. USD/yen is hugging a narrow trading range. Coronavirus infections are still a threat to many currencies. The Australian dollar remains in focus in anticipation of a meeting of the Reserve Bank of Australia.
Investors lapped up risky assets on growing expectations of a robust Chinese rebound. Moreover, the United States continued to report a surge in coronavirus infections. Thus, against the dollar, on Monday, the yuan led the commodity currencies.
Traders bet on a revival in China. As a result, an index of blue-chip Chinese shares soared to its highest point in five years. Therefore, past March 18, against the dollar, the yuan has pushed to its highest levels.
Stephen Gallo works in the BMO Financial Group. He is the European head of FX strategy. Gallo said that the rally in mainland China equities had been the significant catalyst.
Moreover, he added that the only caveat is that the economy of China is not driven purely by forces of the free market. Nevertheless, if regulators in China will engineer a more robust equity market, it may still feed with the rest of the world.
There is a revival in Chinese economic activity. This thus bodes well for Europe and Australia. They both count on Beijing as their biggest trading partner.
Robust data supported the euro’s rise of 0.5% to $1.1303, a two-week high. In May, German industrial goods increased by 10.4%. Thus, it rebounded from its most significant drop since the record started in 1991.
In other news, the bloc’s retail sales figures rose above pre-coronavirus levels in some countries.
Following a 1.2% gain last week, the Australian dollar rose by 0.3% to $0.6970. The market’s focus is on a Reserve Bank of Australia policy meeting on Tuesday.
The dollar edged 0.3% down to 96.87 against a basket of currencies. Since July 2, this is the lowest level we have seen.
This is the current news of the market.
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