Aussie dollar continues to surge as hopes pinned on recovery

The Australian dollar continued to rise in the foreign exchange markets on Monday as traders across the world appeared to pin their hopes on an economic recovery from the coronavirus pandemic.

The currency, which is deeply linked to global risk sentiment and especially to perceptions of risk related to China, began to rise as the post-lockdown era in many countries began to properly settle in.

Over the course of Monday, it was up by 1.3% at one stage in its pair against the dollar.

It was spotted at $0.6772, which was a position closest to its best in four months at one stage.

The currency has now gone up by more than 20% compared to the doldrums it was in in March, which was one of the points at which the global economy tanked due to the virus.

The Australian dollar has also been fuelled by commodity price rises as well.

Australia exports significant amounts of iron ore, and the rise in the price of that commodity has aided the currency’s meteoric success in recent days.

Australia’s near neighbour, New Zealand, also saw its dollar shoot up.

The same went for the Canadian dollar too – which is also reliant in part on commodity exports.

Elsewhere, the single European currency was also a big winner over the day.

According to some analysts, the euro’s prospects have been significantly boosted recently by the news that institutions within the European Union are planning to provide a big financial boost to countries affected by the coronavirus pandemic.

The euro rose by two-fifths of a percentage point against the greenback at one point, reaching $1.1154.

Later, though, it retreated to a position of $1.1115 in this pair.

Another success story this past Monday was the British pound.

The pound rose 0.6% at one stage in its pair against the dollar and led to it being recorded at $1.2425 at one stage.

This represented its best performance in three weeks and came about largely as a result of the country stepping slowly out of its pandemic lockdown – a move which began in earnest last week.

The US dollar continued to see problems.

It was down by 0.1% in its index, which is a device used by traders to track how the currency is doing compared to several others around the world.

Part of the problem for the dollar is the ongoing protests and demonstrations which are happening in cities across the country.

It is understood that these demonstrations themselves are unlikely to directly affect sentiment.

However, there is also some concern that they could cause political instability further down the line – especially in relation to the US presidential election, which is scheduled to take place in November.

The current Republican President Donald Trump is likely to face former Vice President Joe Biden as his Democrat rival.

In China, the offshore yuan – which is the iteration of the yuan that is traded on the international speculative forex market rather than domestically – was down a little.