The euro topped an 11-week high on Wednesday heading for a seven-day win streak, and the dollar plummeted against most currencies as prospects for more stimulus and economic recovery hope led investors to buy riskier assets. Average euro-implied volatility meters jumped to 12%, their highest in a month, suggesting that traders were preparing for moves larger than usual in the single currency.
The Australian dollar hit a five-month high of 0.68282 against the U.S.A. dollars when funds sought exposure to economies expected to receive the fastest recoveries from the coronavirus pandemic. USA. The dollar also fell against the British pound, the Norwegian and Swedish kroner, and the Canadian dollar as mass protests against racism throughout the US weighed on the currency.
An index of dollars against six major currencies fell to almost a three-month low of 97.28. “The strengthening of the risk-bound Aussie and Kiwi combined with the weakness of the safe harbor dollar, yen and franc suggests that investors continued to increase their risk exposures for another day,” Charalambos Pissouros, senior market analyst at JFD Group, said.
“It seems investors are still looking past U.S.-China tensions and civil unrest in the U.S.,” he said. President Donald Trump has threatened to use the military to interrupt protests against racism and police brutality. U.S. equities continue to compete, leaving some traders confused about the direction of the market. In general, traders prefer to bet on a global economic recovery.
Dollar / Yen rose 0.1% last year to 108.79. The euro reached an 11-week high of $ 1.1125 on expectations that policy makers will support the eurozone’s weakest debt-financing economies. The single currency rose last 0.4%. The seven-day win draw was the longest since December 2013.
The euro also rose against the Swiss franc to $ 1.0797, the highest since January. 14, the trade lasts up 0.4%. The euro ignored a decline in economic activity in May reported by IHS Markit’s final Composite Leadership Index (PMI).
In addition, the number of people who lost their jobs in the euro area in April was 211,000, bringing the number of unemployed to 11,919 million or 7.3% of the workforce, up from 7.1% in March. But investors did not care about expectations that the European Central Bank will increase its $ 750 billion ($ 839.25 billion) bond buying program, the pandemic emergency buying program, when it meets on Thursday.
Investors also hoped that a $ 750 billion recovery fund The euro, proposed by the European Commission, would soon take shape and strengthen the countries with the worst results. But Kit Juckes, macro strategist at Societe Generale, said he was “more wary of the euro than some other currencies” because he doubted the implementation of the recovery fund as proposed and that the ECB could continue to introduce liquidity in the markets because of a German court decision a few weeks ago.
The Chinese yuan rose to almost a month-high of 7.0883 against the dollar in the offshore market. China was the first major economy to ease the strict restrictions on closure, making it likely that it would recover sooner than other countries. The Norwegian krone hit a three-month high of 9.4735 against the U.S. dollar, last traded 0.8%. The currency is so far the best performing in the G10 room.
The New Zealand dollar rose 0.3% after previously reaching a three-month high of 0.6430. New Zealand Prime Minister Jacinda Ardern said on Wednesday that she could repeal all social distancing measures to return the country to normal life and prevent the international border closure as early as next week. The Australian dollar was last neutral at 0.6895.