The euro climbs to an 11-week peak as the dollar loses its safe-haven appeal and fells to its weakest since mid-March on investors’ optimism.
The market optimism persisted despite growing concern over U.S.-China tensions and mass protests across the United States. The global coronavirus recovery effort defeated US-China tensions and the worst civil unrest in the United States in decades.
Traders still hope that major central banks will continue to protect their economies from the coronavirus pandemic.
Market risk sentiment was hurt only slightly on Monday. According to reports China had told state-owned companies to halt purchases of soybeans and pork from the United States. The news rose concern that the trade deal between the world’s two biggest economies could be in jeopardy.
Optimism has so far also survived the rising social unrest in the United States. President Trump vowed to deploy the military to halt violence if mayors and governors failed to regain control of the streets.
START TRADINGForex – Dollar loses safe-haven prestige
Commodity-linked currencies strengthened as commodity markets continued their recoveries. Safe havens weakened.
The U.S. dollar index against a basket of six major currencies fell to its weakest since mid-March, at 97.44. The index has fallen about 5% from a peak hit in March, when panic over the COVID-19 gripped the world’s financial markets.
The U.S. dollar fell to a three-month low of 1.3503 against the Canadian dollar and was last trading down 0.4%.
The greenback also fell against the Australian dollar, which rose to $0.6852, its highest since Jan. 24. The currency hardly budged after the Reserve Bank of Australia kept its monetary policy on hold as expected.
The safe-haven Japanese yen fell 0.1% versus the dollar to 109.71.
The euro last climbed to $1.1178, up 0.4% on the day , after rallying to $1.1185, its highest since March 17.
The pound rose above $1.25 to a one-month high of $1.2567. There were reports that Britain may compromise on sticking points in a fresh round of Brexit negotiations with the EU.
The sterling was trading 0.2% higher to the dollar at $1.2518, after hitting its highest since May 1 in early deals. Against the euro, it was up 0.3% at 88.86 pence.
In commodity markets, traders are expecting major producers to extend output cuts at an OPEC+ meeting later in the week.
Brent oil rose another 2% to just over $39 a barrel. U.S. crude was up 1% at $35.86 a barrel.
Spot gold was steady at $1,739.36 an ounce.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money