THE US dollar witnessed a sell-off, down 1.7% to 96.677, marking a two-month low as risk-on sentiment permeates global markets after US-China tension dwindled as President Donald Trump’s measures were seen not as severe as feared.
The sell-off in the dollar later intensified as incoming economic data showed signs of a global economic recovery from the coronavirus pandemic. This helped offset concerns over the worst civil unrest in the United States in decades.
Brent surged 13.19% to US$39.99 per barrel, supported by crude oil supply cuts in the previous week and improving global demand as many countries gradually lifted the lockdowns. Besides, the Brent received additional impetus following rising expectations that major producers agreed to deepen the output cuts.
The euro appreciated by 2.13% to 1.134 to a 12-week high as the European Central Bank (ECB) ramped up stimulus during its monetary policy meeting. The ECB increased its pandemic emergency purchase programme by €600bil (YTD: €1.35 trillion) to bolster the region’s economy following the pandemic crisis. The duration of its crisis bond-buying programme would be extended from the end of 2020 until June 2021, or until the bank believes the crisis is over.
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