The Japanese yen lowered sharply on Tuesday. The currency traded at 104 yen per dollar at last. The yen fell against the other major currencies, too, the euro and the Australian dollar among them.
The U.S. dollar, on the other hand, recovered from the last few weeks lows. It rose by 0.2% to 95.613 against a basket of currencies, rallying against the yen at 104.28. The dollar increased by 1.9% versus the Japanese currency, which is considerably higher than Monday’s 101.18 low.
Before that, the greenback traded at record lows against the Japanese yen and other currencies.
The U.S. currency increased by 0.5% to $1.3067 versus the pound. The dollar gained against the euro and Swiss franc too. It rose by 0.4% versus the euro at $1.1385 per euro and by 1.2% at 0.9361 against the Swiss franc on Tuesday.
However, the currency fell to 0.9299 francs after three days of heavy selling pushed it to its lowest point in nearly five years.
What caused the Dollar’s rally?
The dollar lost significant amounts against the euro, the Swiss franc, and the yen before rebounding. A price war between Russia and Saudi Arabia triggered the biggest daily rout in oil prices since the 1991 Gulf War, as the currency collapsed on Monday.
However, the dollar started to recover after U.S. President Donald Trump issued that he would hold a news conference on Tuesday about economic measures in response to the virus.
Steve Mnuchin, U.S. Treasury Secretary, also stated that the White House would meet with bank executives this week. During that time they will roll out measures for coping with the coronavirus.
Traders expect that policymakers will think of some stimulus to lessen the economic impact of the virus outbreak around the globe.
Commodity-linked currencies also managed to recover from record lows, after the oil prices collapsed on Monday. The Mexican peso rose by 0.5%, while the Canadian dollar gained 0.3% at C$1.3658, and the Russian rouble increased by 3.6%.
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