U.S. Dollar Lowered Monday while Riskier Currencies Rallied

 The U.S. dollar tumbled down as global stock markets surged forward on Monday. Riskier currencies such as the Australian dollar, New Zealand dollar and the British pound soared as well.

The Japanese yen paused downfall after three consecutive days of losses. It managed to rise against the greenback after plunging its lowest level in over two months last week.

The dollar lowered against most of its rivals as Asian and European stocks skyrocketed after four days of losses.

Earlier, the U.S. currency had found support as traders remained suspicious that retail investors who had organized online might continue their assault on hedge fund short positions, thus encouraging more volatility.

But it seems the investors’ focus has shifted squarely to silver. On Monday, spot silver prices skyrocketed by almost 9% in early London trading.

ING’s strategists noted that the surge in silver is a standout in a more or less subdued opening for FX and commodity markets this week. They added that the depth in global commodity markets likely means that retail buying may have less of an impact here than it has on a single stock.

On the other hand, in FX markets speculators are heavily short on greenbacks, and swarmers may find it difficult to rationalize a long silver and a long dollar recommendation.

Against a basket of currencies, the U.S. dollar traded flat on Monday. The index that measures its strength has been mostly range-bound during the recent weeks, after jumping from a nearly three-year low of 89.206 at the beginning of the year.

How did other currencies fare? 

The Sterling was the biggest gainer on Monday, soaring by 0.3% on the day at $1.3732. The Japanese yen remained flat at 104.76 yen per dollar.

The Australian and New Zealand dollars also traded flat, losing some gains on Monday. The euro tumbled down by 0.2% to trade at $1.2111

The Norwegian crown also plummeted down by half a per cent against the greenback to 8.5796 crowns per dollar.

On Friday, the Norway central bank announced about a significant increase in the daily pace of its fiscal Norwegian crown buying. It soared from 800 million crowns in January to 1,700 million in February – noted Jens Naervig Pedersen, the chief analyst for Forex and rates strategy at Danske Bank.

He added that an increase was expected, but its size was a surprise. That means that compared to January, the Norges Bank will buy 18 billion more NOK in February.