The U.S. dollar traded close to two-week lows on February 15 as an expectation of coronavirus vaccine rollouts. A planned $1.9 trillion U.S. stimulus package boosted riskier currencies and stock markets across Europe and Asia.
Among the gainers against the weaker U.S. dollar, the British sterling broke $1.39 for the first time in nearly three years. Meanwhile, commodity currencies strengthened. The South African rand touched a new one-year high.
Many financial markets in Asia remained shut on February 25 for Lunar New Year, while U.S. stock markets will be closed for Presidents Day.
The U.S. dollar index declined by 0.1%, near to last week’s low of 90.249, for the first time since January 27. According to an analyst at MUFG, the greenback could weaken further if market optimism held.
The world’s dominant cryptocurrency remained volatile as it stood at $45,914.75 a day after hitting a record $49,714.66. Bitcoin had rallied 25% last week, increased by endorsements from Tesla and BNY Mellon.
Rival virtual coin ethereum, which often trades in tandem with bitcoin, declined by 4.3% to $1,725. It hit a lifetime high of $1,874.98 on Saturday.
The Chinese yuan hit its most substantial level since June 2018 and settled at 6.4010 per dollar in the offshore market. The euro boosted by 0.2% to $1.21410, extending last week’s 0.6% raise. The U.S. dollar slightly changed at 105.28 yen, rebounding some of the previous week’s losses.
The Australian and New Zealand dollars started the week higher versus the dollar
Meanwhile, the risk-sensitive currencies, the Australian and New Zealand dollars, started the week higher versus the dollar. The Australian dollar increased by 0.23% to $0.7777, and it has a resistance of about $0.7785.
The New Zealand dollar rose by 0.33% and settled at $0.7239, up from its last month’s low of $0.7097.
The Australian and New Zealand dollars have benefited from higher commodity prices and their economies performance. This was followed after their success in controlling the coronavirus pandemic’s spread. Questions over the economic recovery in the United States, meanwhile, was putting pressure on the dollar.
Australia will start inoculating against coronavirus next week. It recently received the first 142,000 doses of the Pfizer-BioNTech vaccine. Meanwhile, in New Zealand, vaccinations should begin on February 20.
Australian three-year bond yields at 0.12% remain pinned near the RBA’s target of 0.10%, while Australian 10-year bond yields increased to 1.30%, the highest since March.
New Zealand yields on 10-year paper boosted to 1.393% but were still off the nine-month high of 1.455% hit last week.