The Australian dollar tumbled down by almost 2% on Tuesday after China’s education ministry cautioned students to carefully consider studying there due to the tension between the trading partners.
On the other hand, the U.S. dollar recovered slightly, gaining against commodity currencies for the first time in June. Traders decided to halt the risk-off exchanges that had continued during the last two weeks, for now.
U.S. jobs data for May boosted the currencies this week, as it showed much better results than expected. Meanwhile, the Japanese yen strengthened, pointing to trepidation over the U.S. Federal Reserve’s next move at its two-day meeting, which is scheduled later in the day. The yen jumped to a one-week high of 107.79. At last notice, It was trading up by 0.5% at 107.90.
Jane Foley, the senior currency strategist at Rabobank, noted that it was surprising that the Aussie ignored the deterioration of the relationship between Beijing and Australia. There have been a few comments from China to Australia during the last few weeks, and despite that, the Australian dollar managed to rise up to 70 cents.
However, the currency fell by 1.7% to 0.6899 on Tuesday after hitting an 11-month high of 0.7043 in Asia. The New Zealand dollar also tumbled down by 1.3% to 0.6469. Even after Tuesday’s decline, the kiwi is higher by 4.5% against the dollar this month, while the Aussie is trading up by 3.7%. The coronavirus appears to be on retreat in Australia, which is also helping this situation. Re-opening is gathering pace in the country.
What about the Euro?
The euro dropped by 0.3% to $1.1258. A statement from the Fed is due on Wednesday, and traders will avoid major moves until then.
The Norwegian crown also tumbled down by 1.7% against the U.S. dollar, to 9.4230. It lowered more than 1% against the euro to 10.5980, declining from the three-month highs it touched the day before. Meanwhile, the Canadian dollar plummeted down by 0.7% to $1.3484.