The euro skyrocketed to as high as $1.20715 on Tuesday, reaching such a level for the first time since March 3. Meanwhile, the British pound rallied to a fresh one-month high at $1.40090, jumping by 1% overnight.
Some analysts noted that support for the common currency likely came from the announcement that the European Union has recently secured an additional 100 million doses of coronavirus vaccine by Pfizer and BioNTech.
Zach Pandl, the co-head of foreign exchange strategy for Goldman Sachs in New York, stated that Europe is the main region that will see accelerating vaccinations during this quarter. However, later in the year, we will see accelerating coronavirus vaccinations, broadly, in emerging market economies.
In the United States, the dollar plunged to a new 6-1/2-week low against major currencies on Tuesday. The greenback had already been losing traction due to U.S. bond yields decreasing from a 14-month peak reached last month.
The dollar index tumbled down as low as 90.877, dropping to its lowest level since March 3. Overall, the currency had lost some 2.7% from its five-month high at 93.439 hits last month.
Against the Japanese yen, the dollar plummeted down 107.975 yen, its lowest level in more than six weeks.
Andrew Gillan, the portfolio manager at Janus Henderson Investors, noted that people seem quite comfortable with the dollar’s likely weakness for an extended period.
What About the Asian Currencies?
The Australian dollar soared as high as $0.7800 on Tuesday for the first time in a month. Reserve Bank of Australia policymakers announced in minutes of their meeting that the country’s economic recovery had surpassed their expectations. They added that an above-trend expansion would likely continue this year and next.
Meanwhile, the offshore Chinese yuan steadied. It traded at 6.4885 per dollar as it reached almost a one-month high against the U.S. currency.