Commodity currencies recover, U.S.-China dispute dampens sentiment

The dollar surrendered minimal gains to commodity prices on Tuesday as oil prices regained momentum. However, it hung on against the yuan as investors weighed optimism about COVID-19 recovery in China against concerns about U.S.-China dispute.

The Australian and New Zealand dollars advanced further, recovering from Monday’s decline. Upbeat activity drove Aussie at $0.6445 and the kiwi at $0.6062.

The yuan increased to 7.1190 per dollar in offshore trade. It recovered from a six-week low record last session but still defeated compared to its performance last month.

Public holidays in Japan and China eased trade tensions but further moves were capped by investors’ dire speculation on the global growth outlook. Approaching Australian and New Zealand central bank meetings also brought caution.