The start of European session trading saw the decline exhibited by most major currencies amid risky markets.
US 10 -year bond yields plunged lower in the European session, with the benchmark at 1.26%. This suggests investors are returning to protection as the recovery is seen as shaky following the Covid-19 uncertainty.
This depreciation has dragged the US dollar to fall as well. At the time of writing, the dollar index is seen trying to hold off from falling lower by trading around the price of 92.52 against a basket of major currencies.
In China, concerns over the slowing post -Covid economic recovery were seen rising, after the country’s cabinet said authorities would use timely bank reserve ratio (RRR) cuts to support the economy.
These concerns have prompted safe-haven currencies, including the yen, swiss franc and gold trading to soar higher this session.
In addition, Japan officially declared a state of emergency in Tokyo due to the surge of Covid-19 cases, just two weeks ahead of the city’s Olympics.
Commodity -linked currencies were among those seen most affected, with the Aussie dollar plunging to a seven -month low against the US dollar as the Reserve Bank of Australia (RBA) remained dovish to maintain easing in current monetary policy.
Kiwi dollar trading was also affected, with prices approaching a seven -month low, and the Canadian dollar sinking to a nearly three -month low against the greenback.
The pound traded steady, depreciating from a price level of 1.38000 against the USD, as concerns over the rise of Covid-19 cases in the UK continued to plague the market.
