The U.S. dollar plummeted down against the British pound and the Antipodean currencies. Its downfall was caused by the surprising improvement in U.S. labor market data, which bolstered expectations for economic recovery and reduced safe-harbor demand for the greenback.
On the other hand, the Australian and New Zealand dollars rallied on Monday. Both of them skyrocketed to their highest point since January after data showed a smaller-than-expected fall in Chinese exports. As it supports commodity currencies, this news boosted the Aussie and the Kiwi. The Australian dollar jumped by 0.34% to $0.6993, while the New Zealand dollar increased to $0.6533.
Despite its fall against risker currencies, the U.S. dollar jumped against the Japanese Yen. It managed to reach near to its highest point in more than two months. Investors are looking out for the outcome of a U.S. Federal Reserve meeting. But sentiment has improved sharply in the forex market as traders focus on signs of a recovery from the pandemic.
Junichi Ishikawa, the senior foreign-exchange strategist at IG Securities in Tokyo, noted that commodities and emerging market currencies are finding it easier to climb up against the greenback on the hopes of an economic rebound. However, it is a different story when it comes to the yen. The dollar traded at 109.67 yen at last notice.
What about the European currencies?
The pound surged forward by 0.25% to $1.2704 in Asia on Monday, close to its highest level since March 12.
Meanwhile, the euro soared to $1.1314 as it continued to ride a wave of optimism after the European Central Bank announced last week that it would increase bond purchases to help the eurozone’s weakest economies.
The onshore Chinese yuan is also in focus. On Sunday, data showed that exports from China, the world’s second-largest economy, dropped less in May than the market expected. While it may help the Yuan gain, some analysts stated that there are still many risks on the outlook, diplomatic tension between the United States and China, and the U.S. presidential election this year among them.
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