European currencies gained while the U.S. dollar lowered

The euro rallied on Monday. It gained 0.4% to $1.1154, before falling back to trade flat at $1.1109. Some strategists recommend buying the euro, with a target of $1.155, as they expect more easing from the European Central Bank at the meeting on Thursday.

The Sterling also soared by 0.6%, jumping to a three-week high of $1.2425. Britain’s move out of lockdown helped to boost the currency.

Meanwhile, riskier currencies surged forward, as traders looked for more signs that the economies may be through the worst part of the crisis caused by the pandemic.

The Australian dollar has gained more than 20% since its March lows. On Monday, the Aussie soared by 1.3%, to a four-month high of $0.6772. It has been growing steadily through May.

New Zealand and Canadian dollars also increased. And the Japanese yen climbed higher, with the dollar lowering by 0.2% to 107.66 yen.

However, the other currencies’ surge caused the U.S. dollar to collapse to its weakest point since March 16, before recovering slightly. The dollar index traded lower by 0.1% at 98.15 against a basket of currencies.

How did the Chinese Yuan fare?

China’s offshore yuan also fell on Monday. But it rallied on Friday, in hopes of a reduction of Sino-U.S. tensions. U.S. President Donald Trump hasn’t tried to impose new tariffs on China during a news conference that day, despite his earlier comments. This further calmed investors, as they feared that the conflict would escalate quickly.

Chinese Caixin/Markit Purchasing Managers Index showed a marginal improvement in Chinese factory activity last month, which was quite unexpected. However, the downfall in manufacturing output had found a bottom in several countries, according to economic data.

While the manufacturing PMI rebounded slightly in the eurozone during May, factory activity contracted heavily. So far, Japan and South Korea have faced the sharpest falls in activity in more than a decade.