Yen, Euro, and Sterling rallied. What about the dollar?
The Japanese yen surged forward by 0.64% today, exchanging hands at 133.66 versus the dollar. On Wednesday, the currency shaved off 0.73%, hitting a one-week low of 134.50. The common currency also climbed up by 0.28% to $1.064 after dropping 0.27% yesterday. In addition, the British Pound jumped by 0.23% to $1.205 after tumbling by 0.11% on Wednesday.
Meanwhile, the U.S. dollar plummeted on Thursday after rallying in the previous session. Traders were cautious at the end of the year as China’s reopening new lost some of its luster. However, analysts think investors shouldn’t read too much into price moves ahead of the new year.
Craig Erlam, the markets analyst at currency platform Oanda, noted that the global markets seem to be in drifting mode, awaiting the turn of the year when investors and traders return. Besides, policymakers’ statements and the most up-to-date data will give participants new insights.
For now, traders are contemplating the impact of China’s fast loosening of its strict coronavirus curbs. The country will remove its quarantine rule for inbound travelers from January 8. However, the United States, India, Japan, and some other countries stated that they would require Covid-19 tests for travelers from China.
Vishnu Varathan, the head of economics and strategy at Mizuho Bank, noted that many countries are adopting an additional layer of testing for people arriving from China. That reflects hobbled resumption of travel amid the country’s outbreak. However, such demands might also fuel fears of the virus disrupting global recovery.
Near term, there are still some concerns about how soon we can get over this coronavirus resurgence, – stated Moh Siong Sim, a currency strategist at the Bank of Singapore. He also added that the growth outlook for China could be much steadier in the medium term.
How are the U.S. dollar and the Chinese Yuan faring now?
The U.S. dollar index dropped by 0.11% to 104.23 against a basket of six major currencies on Thursday after gaining 0.18% in the previous session. At the same time, the Chinese offshore yuan soared by 0.31% to 6.978 per USD.
The Australian dollar exchanged hands lower by 0.23% at $0.672 at last. The New Zealand dollar also shaved off 0.17% to $0.63.
Furthermore, Asian EM currencies recovered some of their losses in thin trade during this session. The rupiah gained 0.2% today after declining earlier in the session by about 0.3%. Overall, this currency plunged by almost 9% this year.
The Philippines peso added 0.6% on Thursday. The Thai baht and the Singapore dollar also increased by about 0.5% and 0.1%, respectively.