Today, the US dollar was weaker against the Great Britain pound and commodity currencies but gained on the euro and the Japanese yen. The currency’s moves were mostly driven by the positive market sentiment.
The traders’ mood was relatively optimistic by the weekend. The major contributors to the optimism was yesterday’s announcement of stimulus measures by the European Central Bank and today’s decision by the People’s Bank of China to set the mid-range point for the yuan higher. The rally of crude oil helped the sentiment as well.
Considering the fundamentals, it makes sense for commodity currencies and other high yielding assets to gain on the dollar. At the same time, the same risk appetite made the yen weaker. As for the euro, it is to be expected for the currency to correct after the strong rally.
EUR/USD edged down from 1.1177 to 1.1156 as of 19:41 GMT today, though it bounced from the daily low of 1.1080. GBP/USD rallied 1% from 1.4277 to 1.4384. USD/JPY gained from 113.18 to 113.69.
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