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New Zealand and Australian dollars made the biggest gains among the major currencies on Tuesday, supported by comments from the two countries’ central banks, while the US dollar fell against the Japanese yen and the Swiss franc amid some risk aversion in the markets.
The Australian dollar rose strongly after the Reserve Bank of Australia stuck to its plan to scale back its bond-buying program, ignoring concerns about the economic impact of increasing coronavirus infections. And the dollar rose against its US counterpart by half a percent to 0.7393 US dollars.
The New Zealand dollar rose 0.6% to $0.7007 after New Zealand’s central bank said today that it would soon begin consultations on ways to tighten mortgage lending standards, as it seeks to control a bloated housing market and protect homebuyers.
The US dollar fell 0.1% to 109.21 yen, near the low recorded on July 19 at 109.07, the lowest since late May.
Against the Swiss franc, the dollar was trading at 0.9046 francs after hitting a one-and-a-half month low of 0.9038 in the previous session.
Market watchers have recently pointed to falling US Treasury yields to indicate fears of upcoming disappointment with economic growth.
The 10-year US Treasury yield fell on Monday after an Institute for Supply Management report showed that growth in US manufacturing activity in July slowed for the second month in a row.
The outlook is foggier due to the spread of the mutated Delta strain of the Coronavirus. In the United States, hospitalizations in Louisiana and Florida reached a new peak.
That has dampened enthusiasm about a trillion-dollar infrastructure investment bill that may be ready for a final vote as early as this week.
The euro rose slightly to $1.1880, after losing some momentum after hitting a one-month high of $1.1909 on Friday. The British pound gained 0.2% to $1.3914, falling from a one-month high hit on Friday at $1.39,835.
