Euro hit high on Thursday while the U.S. dollar declined

The euro skyrocketed to its highest point in three weeks. It traded at $1.0975 in Asia on Thursday. Emerging market currencies jumped as well, while the Swiss franc and Chinese Yuan both hit their highest points in weeks.

However, the British pound stays under pressure due to inflation data. Traders argued about the Bank of England cutting interest rates below zero, which caused the sterling’s drawback.

The U.S. dollar tumbled down on Thursday, while riskier currencies rallied. Investors are hopeful about a fast recovery from the COVID-19 pandemic despite negative forecasts and rising Sino-U.S. tensions.

What about Asian currencies?

The Chinese Yuan was steady at 7.1067 in offshore trade on Thursday. The U.S. took fresh aim at Beijing’s handling of coronavirus on Wednesday, but so far, the Yuan managed to hold on to its gains. However, there are still some diplomatic tensions between China and Australia.

The Australian dollar hit a ten-week high of $0.6616 as it broke free from two months of rangebound moves in bullish overnight trading. The New Zealand dollar rallied as well, hitting a ten-day top of $0.6157.

Imre Speizer, Westpac FX analyst, thinks that both currencies will continue gaining. According to him, the current big rally hasn’t finished yet. The equities are climbing up, and currencies are following them, even if not as strongly.

The Aussie and the Kiwi lowered in morning trade on Thursday as markets await a speech from Australia’s central bank chief. But the Australian dollar has skyrocketed about 20% after the S&P 500 index gained 35% after its March lows.

Meanwhile, the dollar climbed up higher against the Japanese yen to 107.68. Japan’s flash purchasing managers’ index showed manufacturing activity falling again in May. Investors await more stimulus from the U.S. Federal Reserve. According to ANZ analysts, policymakers continue to stress that whatever resources are required will be made available.