The Euro Skyrocketed Thursday Along with Risk-on Currencies

 The Euro rallied to an almost three-month high on Thursday as the U.S. dollar moved on the defensive due to downbeat U.S. economic data and optimism about Covid-19 vaccines.

Traders bought riskier assets tied to emerging markets and global commodities. The Sterling reached close to a three-month high against the greenback. Investors also awaited new details on trade talks between the European Union and Britain this week.

On Thursday, the Swedish crown tumbled down, both against the dollar and the Euro, after Riksbank announced that it was expanding its quantitative easing program.

Furthermore, Federal Reserve minutes on Wednesday hinted that the central bank would probably strengthen their quantitative easing program at the next meeting in December. That put more pressure on the dollar.

A few Fed policymakers seemed hesitant to make near-term changes to the guidance due to the uncertain outlook. However, according to the minutes released on Wednesday from the Fed’s Nov. 4-5 meeting, many participants assumed that the Committee might want to enhance its guidance for asset purchases sooner than later.

FX market was subdued on Thursday as U.S. financial markets are closing later on Thursday for the Thanksgiving holiday.

How did major currencies trade?

Euro/dollar pair traded higher by 0.1% at $1.1924 after jumping to $1.1941, its highest level since Sept. 1. The dollar index was flat at 91.99 against a basket of currencies. Though earlier it had plunged to a near three-month low of 91.84.

Restrictions designed to hinder the spread of the Covid-19 in Germany will be in place until at least the end of December, possibly longer stated Chancellor Angela Merkel on Thursday.

Meanwhile, Scandinavian currencies plummeted down. The Swedish crown dropped by 0.4% against the dollar at 8.52 and declining by the same extent against the Euro at 10.1585.

On Thursday, Sweden’s central bank announced that it would expand and extend its asset purchase program to support the economy through a second wave of the pandemic.

The Norwegian crown tumbled down by 0.4% at 8.8515 versus the U.S. dollar, after skyrocketing earlier to a three-month high of 8.8160. It also plunged by 0.4% at 10.5545 against the Euro.

The Australian dollar lowered by 0.1% at 0.7358. However, earlier it soared to a near three-month high of 0.7374, while the Canadian dollar remained neutral at 1.3007 against the U.S. dollar.

The British Pound plummeted down by 0.2% at $1.3355 after jumping to a three-month high of $1.3399. It also dropped down by 0.3% against the Euro at 89.22 pence.