Oil linked currencies gained on Tuesday as the oil prices surged forward. The Australian dollar rose by more than 64 cents to $0.6454. The Reserve Bank of Australia left three-year government bond yields and its targets for the cash rate unchanged at 0.25%, further boosting the Aussie.
The Norwegian crown soared as well, along with the other commodity currencies. U.S. crude grew by 6.6%, and Brent added around 5% as the countries eased lockdown restrictions worldwide, Italy, Finland, and several U.S. states among them.
Meanwhile, the Chinese yuan recovered from a six-week low of 7.1560, which it hit in the previous session. The currency rose to 7.1195 per dollar in offshore trade, but it is still well below the range it was in last month. Public holidays lightened trade in Japan and China during the previous few days.
What about the Euro and the U.S. Dollar?
The euro fell by 0.1% to $1.0892 as German academics challenged the European Central Bank’s bond-buying program. They took their complaint to court. A ruling was due later on Tuesday, and traders were avoiding significant moves.
The U.S. dollar edged up by 0.1% to 99.55 against a basket of its rival currencies on Tuesday. The currency continues climbing due to the investors’ concerns about rising tensions between the United States and China.
The dollar jumped after U.S. President Donald Trump blamed China for the coronavirus outbreak ahead of the Nov. 3rd presidential elections. His statements raised the fears of a new trade war. But the dollar’s gains were marginal due to the improved risk sentiment as the restrictions eased further in several countries.
The investors had turned their gaze back to the easing of the ‘stay at home’ measures, and the slowdown in both infected cases and deaths helps the sentiment – stated Charalambos Pissouros, the senior market analyst at JFD Group. Traders hope that the global economy is close to or just past the worst of the sharp downturn.
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