Dollar falls, yuan gains on improved risk appetite
The dollar fell against risk currencies on Tuesday as hopes for a COVID-19 vaccine and big corporate deals lifted appetite for riskier assets.
The yuan hiked to a 16-month high as overall Chinese data showed a steady economic recovery in the world’s second-largest economy, while the Aussie was lifted by the RBA’s policy minutes indicating a further cut to the cash rate.
The dollar index fell to 92.910, falling further from the one-month high of 93.664 hit last Wednesday. It stood at 105.66 on the yen, near the two-week low of 105.55 hit on Monday.
The euro rose 0.2% to $1.1889 on its fifth straight day of gains. The Aussie climbed 0.4% to $0.7316, while the Chinese yuan soared to a 16-month high in onshore and offshore trades. The yuan’s strength also lifted the MSCI emerging market currency index to a six-month peak.
The pound stood at $1.2855 after falling 3.66% last week. Markets barely stirred after the UK government won an initial Parliamentary vote on its bill to violate the Brexit deal with the EU. Still, the British currency remains vulnerable as the EU warned against the bill, stating it would collapse trade talks and leave the UK in a messy divorce.