US dollar reached a two-month low
The dollar weakened against all of its peers in the top 10 currencies, while U.S. stocks rose after various countries announced new plans to open their economies as the infection rate continues to fall. Safe assets have fallen in price. Bloomberg Dollar Spot Index fell 0.9% on Tuesday to its lowest level since March 16. Consumer confidence data published on Tuesday was in line with expectations, while new home sales exceeded economists' estimates.
Commodity currencies such as the Norwegian krone, the Australian dollar and NZD strengthened as oil prices rose. The yield on 10-year treasury bonds rose by 4 basis points to 0.70%.
USD/JPY decreased by 0.1% to 107.65. Japan announced the lifting of the state of emergency regime in the country. According to the Hong Kong trader, the crosses against the yen were bought to fix the rate in Tokyo and the momentum was maintained during the morning London session. AUD/JPY shot thanks to the stops above 70.80; GBP/JPY was bought at the opening of trading in Tokyo. Head of Bank of Japan Haruhiko Kuroda said that the central bank will consider changing interest rates as part of its program to control the yield curve, if necessary. According to the DTCC data, on May 28 it is expected that options with 107.90 USD strike will expire. On May 28, options with a US$1.6 billion strike are expected to expire.
Traders said that FX turnover increased with London and New York coming back from a long weekend. GBP/USD rose by 1.3% to 1.23486, the highest level since May 12; the pound rose the second day since the opening of trading. EUR/USD rose by 0.7% to 1.0972; EUR/GBP fell by 0.5% to 0.8930. Sweden will not support the EUR 500 billion recovery plan proposed by France and Germany last week.
AUD/USD rose by 1.5% to 0.6645, the highest level since March 9. According to Asian currency traders, the rise in the spot market caused stops on buying short-term players with leverage above Monday's high of 0.6550. At the same time, some players went on long position in AUD with a short position, according to Asian currency traders. AUD/USD is testing 200-DMA at 0.6659. NZD/USD broke through 100-DMA for the first time since February 12 today; it rose 1.7% to 0.6204, partly due to the data that showed that the country had a trade surplus in April amid falling imports.