Euro and Sterling rallied along with Asian currencies

European currencies rallied on Tuesday. The euro increased by 0.8%, the last trading at $1.08835. The Sterling also skyrocketed. Even though traders awaited news about the British Prime Minister Boris Johnson, who is fighting his worsening case of coronavirus in intensive care.

While the analysts are concerned about Jonson’s condition, they think that the government’s policy direction to fight the virus won’t change. As a result, the pound rose by 0.6% during the last session.

Kenneth Broux, the FX strategist at SocieteGenerale, stated that there is a nice decline in volatility across forex and equity markets. According to him, central banks have done a superb job in alleviating the strain in dollar markets, and that’s showing.

Meanwhile, oil soared on Tuesday due to the hope that oil producers will agree to cut output in the face of lowered demand due to the coronavirus pandemic. As a result, commodities-exposed currencies rallied.

The Norwegian crown and South African rand skyrocketed, both soaring more than 2% during the day. The Norwegian crown hit a fresh three-week high against the U.S. dollar, at 10.4612 crowns per dollar.

On the other hand, the Australian dollar climbed up by 1.5%. The Reserve Bank of Australia has slashed interest rates and embarked on quantitative easing recently.

Even though these currencies rallied on Wednesday, they suffered significant losses beforehand as the investors moved on the U.S. dollar in the midst of coronavirus crisis.

What about the U.S. dollar?

The dollar lowered by 0.7% against a basket of currencies on Wednesday, as the risk sentiment improved across equity markets. And European shares ended up the second day in a row.

Furthermore, the greenback fell by 0.1% against the yen as Japanese Prime Minister Shinzo Abe issued a state of emergency for parts of the country on Tuesday. As an attempt to slow down the spread of coronavirus.

The greenback fluctuated wildly in recent weeks in volatile trading. However, action by central banks to ease the demand for dollars has helped bring some calm to markets.