The U.S. dollar remained below recent highs on Tuesday. Traders were anticipating U.S. policymakers’ speeches to gauge whether rising yields would decline. Meanwhile, the New Zealand dollar tumbled down on Tuesday. The Turkish lira also stabilized after plunging by 7.5% on Monday. President Tayyip Erdogan fired a hawkish central bank chief, causing the currency’s collapse.
The dollar declined by 0.1% against the safe-haven Japanese yen to 108.74 yen. However, it remained steady at $1.1928 per euro and gained against the Aussie, kiwi, and sterling.
The New Zealand dollar plummeted down to a three-month low after the government introduced new taxes to fight housing speculation. Investors expected that move to allow the central bank to hold interest rates lower for a longer period and with much less risk of a property bubble.
ANZ Bank analysts noted that New Zealand’s Reserve Bank would probably revise its house price forecasts. However, that will add caution around the official cash rate rally via housing-induced domestic momentum.
The kiwi tumbled down by 1% on Tuesday. It traded at $0.7093 at last. The Australian dollar also decreased by about 0.4% to $0.7711.
How Did the Sterling and Oil-Linked Currencies Fare?
The British Pound lost nearly 0.2% to $1.3845 today. The surging coronavirus cases forced Germany to extend its lockdown until April 18. The government asked citizens to stay home over Easter.
Chancellor Angela Merkel warned that they are basically in a new pandemic currently, with more transmissible coronavirus variants sweeping Europe.
Meanwhile, oil-linked currencies lowered along with crude prices due to concerns about a new wave of infections bringing more lockdowns in Europe.
On Tuesday, the Canadian dollar fell to C$1.2544 per dollar. The Norwegian crown also tumbled down by about 0.2%, as benchmark Brent crude futures decreased by more than 1%.
The U.S. dollar index was almost flat in Asian trade at 91.831 against a basket of six major currencies after shaving off 0.32% on Monday.
On the other hand, the Turkish lira exchanged hands at 7.8500 per dollar after falling to a record low of 8.485 on Monday. Despite the lira’s fall, investors remained confident in emerging market currencies. It seems they have not perceived the third firing of a central bank chief by Erdogan during the last three years as a wider risk factor.
In Asia, the MSCI emerging market currency index declined slightly on Monday, but it steadied again on Tuesday. The Chinese yuan also remained firm despite U.S. and European sanctions, trading at 6.5095 per dollar.