After slipping earlier, the Australian dollar rises to a 1-week high. Against the dollar, the Japanese yen falls after reaching a six-day low.
Peter Navarro is a White House trade adviser. He said that he’s saying that the trade deal with China was “over” was out from context in his comments. Thus, on Tuesday, the euro and other currencies were higher.
French business activity rebounded more than forecasted in June. Because of that, the common currency got a boost. Thus, it returned to growth after three months of an unprecedented downturn.
On Monday, Navarro said that the trade deal with China continues in place. Thus, he walked back on his earlier remarks that the pact was over—the stocking volatility in markets was frazzled by the coronavirus pandemic.
Meanwhile, the United States President Donald Trump tweeted that the deal with China is fully intact.
Dollar and Others
Having fallen earlier, the Australian dollar rose to a one-week high. As a result, the safe-haven Japanese yen slipped to a six-day low.
Lee Harman is a currency analyst at MUFG. He said that they expect it limited further fallout. This is because Donald Trump is expected to remain committed to phasing one trade deal in the run-up to the election.
However, he said that last night’s price action does highlight that the forex market remains sensitive to uncertainty in trade policy. It continues a potential trigger for higher volatility.
Overnight volatility of the euro rose to nearly 10%. This is the highest in almost three weeks.
Hopes of an economic re-opening in many parts of the world has torn the market. Moreover, signs that coronavirus infections raised in the United States has torn the market. Thus, the wild swings in currencies have come as a result.
After rising to 0.6935, the Australian dollar traded up 0.3%. This is its highest since June 16.