U.S. dollar declined against the other major currencies

The U.S. dollar tumbled down against European and Asian currencies on Wednesday. While traders observed mass protests against racism spreading across the United States, the British pound, the yen, and the Swiss franc jumped against the dollar.

The U.S. currency plummeted down to 108.47 against the Japanese Yen. And it came to 0.9613 Swiss francs, falling close to a two-month low. Furthermore, the greenback tumbled down to a one-month low of $1.2615 against the British pound.

Yukio Ishizuki, the FX strategist at Daiwa Securities in Tokyo, stated that the dollar is generally weak. It dropped against all safe-haven currencies.

On the other hand, the euro remains strong. It was at $1.1186 in Asia, close to the highest point since March 16. Traders expect that policymakers will support the euro zone’s weakest economies. Such hopes bolster the currency.

What about the Asian currencies?

On Wednesday, the Chinese yuan briefly reached its strongest point since May 13 in onshore trading. But, by the end, it traded at 7.1068 per dollar. The currency’s rally was caused by new data. A private survey showed China’s services sector is making a profit again.

As the Caixin/Markit services Purchasing Managers’ Index reported, China’s services sector returned to growth in May for the first time since January.

Meanwhile, the riskier currencies rallied, as investors turned to them due to the unrest in the prospect of more U.S. government stimulus, and a global economic recovery also boosted them against safe-havens.

The Australian dollar surged forward by more than 1% to $0.6982. The currency hit a five-month high versus the dollar. According to Yukio Ishizuki, the Aussie has a lot of room to run as there are a lot of shorts that need to be covered. And the story of economic recovery is the main factor.

The New Zealand dollar also skyrocketed to $0.6430, reaching its highest point since March 9. Traders think that sentiment has turned bullish for the Australian and New Zealand dollars due to easing lockdown restrictions and rising commodity prices.