Investors welcomed the Chinese authorities ’announcement to reduce Covid-19 restrictions in major cities, driving trading of most major currencies higher.
Entering the European market session, the risk -sensitive currency Aussie dollar extended its gains to a nearly five -week high while the New Zealand dollar was a four -week high.
Shanghai said on Sunday that it would lift restrictions on businesses starting June 1, while Beijing has reopened its public transport division as well as several shopping malls and other places as cases of the infection stabilize.
This rising sentiment pushed the US dollar, which is usually considered a safe-haven to continue trading at its weakest level for almost a month.
Fading hopes for an aggressive tightening by the Federal Reserve (Fed) after expectations of a 50 basis point interest rate hike at the next policy meeting, also added gloom for greenback dollar trading.
Meanwhile, the euro remained strong at a nearly one -month high with investors focused on European Union (EU) efforts to secure an agreement to block Russian oil.
If the EU manages to reach an agreement on the issue of Russian oil sanctions, it could push the euro to depreciate again as its impact on the European economy is huge.
Moreover, the pound continued to hold on to its gains by trading steady at around 1.2650 against the US dollar.
