On Tuesday morning, the US national currency showed a downward trend. The main reason for what happened can be considered the increasing hopes of market participants for a general economic recovery after the coronavirus pandemic, which pushes them to take risks using less reliable currencies in their work. However, tensions also persist amid a worsening conflict between the US and China.
The Australian and New Zealand dollars immediately responded to the current market situation and showed growth in the region of 0.5% on that day, which still did not allow them to approach the maximum values that they were able to reach last week.
The national currency of China, which also immediately responded to the slightest changes in relations between the two largest economic powers, was noted as stable. However, other currencies in the Asia-Pacific region have recorded some growth.
Analysts said that there was a situation where multidirectional pressure is exerted on currency markets, which does not give much scope for action. On the one hand, the conflict between China and the United States of America is forcing investors to stay alert, on the other hand, the gradual lifting of quarantine measures in most countries of the world has a positive effect on the moods of the players, as it hints at the near economic recovery.
The decline in the value of the dollar was recorded in relation to a basket of six major currencies. It lost about 0.23% and reached 99.618. In relation to the national currency of Japan, the yen, the US dollar strengthened slightly: its level amounted to 107.83 yen per dollar.
At the same time. the national currency of Australia has risen in price by 0.5% against the American currency and moved to the line at 0.6571 dollars. New Zealand "kiwi" also rose within these limits and began to be valued at 0.6129 dollars.
The yuan dropped to 7.1326, which was only slightly higher than the lowest level for the last seven months at 7.1435, which was recorded at the end of last week.
Several factors are now driving the dollar: global trade recovery, success in the fight against the COVID-19 pandemic, including news of a vaccine against the virus, as well as pressure from China on Hong Kong to promote its laws. All of these catalysts can have a serious impact on the quotes of the American currency. Demand for the dollar may continue to decline, while investors, on the contrary, received an additional incentive to riskier deals.
The pound also rose by 0.3% last Tuesday and took the mark of 1.2218 dollars. It can be recalled that its value was 1.1185 dollars the other day. The pound was followed by the single European currency, which increased in price by 0.25%: its level was 1.0925 dollars on Tuesday, while Monday's rate was 1.0898 dollars.
The lull in the currency market becomes an occasion for participants to turn their attention to more risky transactions. Thus, the market leaders are the national currencies of Mexico (peso) and Brazil (real), which were able to increase their value against both the pound and the euro by 4% and 5%, respectively. This means that now is the perfect time to restore quotes of "risky" currencies.
The material has been provided by InstaForex Company - www.instaforex.com