The New Zealand dollar and the Australian dollar rose earlier. More data points to signs of the recovery of the economy. Investors are waiting for the Federal Reserve meeting.
There was a surprising improvement in the United States labor market data. It bolstered expectations for economic recovery. Moreover, it reduced the safe-harbor demand for the greenback. Thus, against the British pound and Antipodean currencies, the United States currency fell.
Furthermore, data showed a smaller-than-forecasted fall in Chinese exports. Chinese exports are supporting commodity currencies. Thus, both the New Zealand dollar and the Australian dollar both rose to their highest since January.
There were recent gains in long-term Treasury yields. This happened because investors were awaiting the outcome of the United States Federal Reserve meeting. Thus, against the yen, the United States dollar traded near its highest in more than two months.
Traders focused on signs of a rebound from the coronavirus outbreak. This hurt the dollar and drove investments into so-called risk-on trades. Thus, in the currency market, sentiment improved dramatically.
Dollar and Others
Junichi Ishikawa is a senior foreign-exchange strategist at IG Securities in Tokyo. He said that emerging market currencies and commodities find it easier to rise against the greenback because of the hopes of economic recovery. Nevertheless, when it comes to the yen, it is a different story.
Ishikawa also said that, for the greenback/yen pair, the focus is more on yields. Thus, this pushes the currency pair higher.
Approaching the highest since January 2, the Australian dollar rose 0.34% to $0.6993.
The dollar in New Zealand raised to $0.6533. Since January 29, this is the highest indicator we have seen.
On Monday, in Asia, the greenback fell by 0.25% to $1.2704 against the pound. Thus, it was close to its lowest since March 12.
The dollar was trading at 109.67 yen. It was close to the two-month high set on Friday.
