U.S. dollar lost some gains while the Sterling and Euro soared
The U.S. dollar remained steady on Tuesday after skyrocketing during the previous session against the basket of six major currencies. On the other hand, the Euro, the British Pound, and the Japanese Yen managed to gain some losses after hitting multi-year lows. Despite that, the safe-haven greenback was still strong.
The dollar index stood at 113.6, shaving off 0.5% on the day. It remained near its 20-year high of 114.58, though. Meanwhile, the sterling surged forward by more than 1% to $1.0810 on Tuesday. It was on track for its biggest daily percentage rally in almost seven weeks. At the same time, the common currency jumped by 0.2% to $0.9629, while the Yen added 0.3% versus the U.S. dollar at 144.28.
Forex markets seemed more optimistic today, risk-off sentiment lifting as traders moved on riskier assets. U.S. stock futures and European shares also soared, with U.S. treasury yields firming after their recent gains.
Simon Harvey, the head of FX analysis at Monex Europe, noted that some investors were slightly trimming their long greenback positions. However, the New York open would show how those treasury yields were going to play throughout the day. If the yields raise, the traders will likely return to safe-haven currencies. The sterling also seems to be on shaky ground and might still lose its gains easily.
Despite its surge, the euro traded near its 20-year low reached a day earlier. The Japanese yen also exchanged hands near its 24-year nadir hit last week. Moreover, the British Pound didn’t stray far from its record low of $1.0327 reached yesterday.
How are the Australian and New Zealand dollars faring?
The Aussie and kiwi recovered on Tuesday after plunging to 2-1/2-year lows during the previous session. The Australian dollar climbed up by 0.57% to $0.6490. At the same time, the New Zealand dollar rallied by 1.2% to $0.5702.
On the other hand, the EM currencies didn’t add any significant gains today. Most of them suffered four days of substantial losses that weakened the currencies. Still, Hungary’s forint jumped while traders waited for its central bank’s rate decision. Overall, the forint increased by 0.2% versus the euro today. Analysts expect the National Bank of Hungary to hike the key interest rate by 100 basis points to 12.75%. However, the currency has plunged by more than 9% this year.
On Tuesday, South Africa’s rand strengthened by 0.6% in early trade. During this session, the Russian rouble also added 2% against the U.S. dollar at 58.1.
