Recently, the world's currency markets have seen increased liquidity, which works in conjunction with a general positive trend based on ignoring bad news, and a strong reaction to good news, which is also quite enough.
Against this background, the national currency of the United States of America begins to feel insecure again and shows a reduction in its positions against the main currencies of the world at the beginning of the week. At the same time, there is a fairly significant strengthening of the pound sterling, which in turn plays back the signs that a trade deal with the European Union may still take place, as evidenced by significant progress in the negotiation process between the parties.
Nevertheless, investor sentiment is still not certain. There is still no complete certainty about what is happening, which causes them to be torn between several fundamental factors. In particular, the pressure is coming from the rapid spread of the coronavirus pandemic, the fixation of new anti-records in the number of new infections and deaths. In addition, the possible appearance of a vaccine against COVID-19 in the near future, news of which literally blew up the markets last week, is also being evaluated. The hope that the complex epidemiological situation will be reversed allows us to think about a faster way out of the economic crisis caused by the impact of the pandemic and restrictive measures.
In general, the world's major currencies are finding points for growth, while the US dollar begins its negative dynamics. In particular, its index against a basket of six major currencies fell to 92.565 points on Monday.
As for the Brexit news, it is now acting as a catalyst for the movement of the pound sterling. The compromise in the negotiation process, according to analysts, is fast approaching, and its main reason lies in the fact that Boris Johnson's chief adviser is leaving his post, and it was he who expressed the most adamant position.
Moreover, the chief negotiator between the UK and the EU, David Frost, has already made a statement that progress in the negotiation process has already happened, but it is not enough to make a final decision on the urgent issue.
In this regard, I would like to note that the foreign exchange market should be very careful, since there may be unexpected and very significant fluctuations in exchange rates, the basis for which will be news about progress in negotiations.
The pound sterling against the US dollar showed growth to the level of £1.3226 per dollar. In relation to the euro, the pound also exhibited growth to £89.61 per euro.
The Japanese yen also increased its value against the USD (up to £104.49 per dollar). This indicator turned out to be the worst over the past almost six months.
Despite news of a successful coronavirus vaccine trial, the number of infections continues to increase significantly, forcing investors to return to quieter sectors. Recall that the number of cases in the US already rose to 11 million by Sunday, which was evidence of the acceleration of the pandemic.
The current week may reflect the strengthening of the US dollar against the Japanese yen if the stock market maintains the positive momentum it received last week.
Currency market participants are also waiting for the results of the Reserve Bank of Australia's November meeting, which was held earlier. The position of the authorities regarding the future economic course will be known on Tuesday, based on the current situation of recession in the country's economy. Then it will become clear where the Australian dollar will move. In the meantime, the aussie rose and settled at Au $0.7287 per dollar.
The New Zealand dollar is also growing. On Monday, it rose 0.42% and the current level is 0.6864 kiwi per dollar, which is already quite close to the maximum value of 0.615 kiwi per dollar.
The Chinese yuan also rushed upwards, which allowed it to reach its maximum values in relation to the American currency. Its rate today was 6.5818 yuan per dollar.