NEW YORK- Safe havens the U.S. dollar and Japanese yen fell on Tuesday, and higher-risk currencies, including the Australian dollar, jumped, as risk appetite grew on optimism that the worst of the economic downturn from the spread of the coronavirus is in the past.
U.S. stocks opened higher as cheer over business reopenings overcame concerns about U.S.-China tensions and mass protests across the United States over the death of an African-American man in police custody. .N
“The good times continue to roll in risk markets,” Mazen Issa, senior FX strategist at TD Securities , said in a report. “As intense as the rally has been, this is likely set to continue as the breadth of the equity rally has now spread outside the U.S.”
The dollar index against a basket of major currencies fell 0.28% to 97.61 after going as low as 97.43, the lowest since March 13.
The greenback gained 0.75% against the Japanese yen to 108.29 yen, the highest since April 13.
The Australian dollar jumped 0.84% to $0.6854, after reaching $0.6869, the highest since January 23.
Australia's central bank held rates at all-time lows on Tuesday and sounded less gloomy as the economy gradually reopens during what is likely to be the worst quarter since the Great Depression of the 1930s. u
The euro was supported by expectations that the European Central Bank will deliver more stimulus when it meets on Thursday.
A 1.85 trillion euro ($2.04 trillion) fiscal package proposed by the European Commission to lift the region's economy eases the pressure to act speedily. Many economists nevertheless expect the 750 billion Pandemic Emergency Purchase Programme (PEPP) to increase by 500 billion euros. ABN Amro thinks it will double in size.
The single currency rose 0.35% to $1.1173, after earlier reaching $1.1187, the highest since March 17.
Sterling climbed above $1.25 to its highest in a month against the dollar on Tuesday, as signs that Britain might be willing to compromise on sticking points in a fresh round of Brexit negotiations with the European Union provided support.
(Reporting by Karen Brettell; additional reporting by Olga Cotaga in London; editing by Jonathan Oatis) ((email@example.com))