The Aussie and New Zealand dollar were the weakest due to monetary loosening from their corresponding central banks.
The dollar started the week intense due to risk aversions induced by the growing number of new coronavirus cases global, worries about the worldwide economic revival, political uncertainty correlated with the forthcoming presidential election in the United States, and additional factors. Interestingly, other safe currencies, such as the Japanese yen and the Swiss franc, missed joining the rally. Gold, also customarily considered to be a haven, was also under tension.
The Reserve Bank of New Zealand kept monetary policy consistent
Nevertheless, it repeatedly signaled that it is planning for fulfilling negative interest rates. That made the New Zealand dollar remarkably weak, though not as fragile as the Australian dollar.
Executives from the Reserve Bank of Australia were also arguing about an interest rate cut. However, they were not sure if negative rates is a proper measure to prop up the economy. The probable reason why the Australian dollar did worse than its New Zealand equivalent was that analysts do not require the RBNZ to perform until the next year. At the same time, the RBA may cut rates as soon as the next month.
The Great Britain pound was under compulsion from lack of development in trade talks among the United Kingdom and the European Union and the growing number of COVID-19 cases and measures to stop another epidemic.
Turkey’s central bank shocked markets by a notable interest rate hike. The lira surged afterward, though the rally has soon petered out.
EUR/USD fell from 1.1846 to 1.1630. USD/JPY surged from 104.51 to 105.55. GBP/USD dropped from 1.2928 to 1.2742. AUD/USD plunged from 0.7296 to 0.7030. NZD/USD slumped from 0.6764 to 0.6546.