The dollar hovered at 2.5-year lows on Tuesday against other major currencies as the euro gained amidst heightened geopolitical tensions. Comments from Federal Reserve Chair Janet Yellen continued to weigh on the greenback.
The yen was higher, with USD/JPY falling 0.58% to 108.62. Analysts are calling the currency pair a “strong buy” today. The greenback also slipped against the Swiss franc, with USD/CHF down 1.07% to 0.9451.
The dollar was also lower against its Canadian counterpart, with USD/CAD down 0.09% to 1.2497 mid-morning.
The Aussie held steady against the greenback, trading at 0.7973. The New Zealand dollar was higher against its U.S. counterpart, rising 0.21% to trade at 0.7272.
Investors flocked to safe havens on Tuesday after news that North Korea fired a missile that flew over Japan. The missile test prompted South Korea, Japan and the U.S. to request a United Nations Security Council meeting. A meeting is expected to be held later today.
Comments from Fed Chair Janet Yellen continued to weigh on the greenback. Yellen, speaking at the Jackson Hole symposium on Friday, did not reference monetary policy during her speech. Investors were expecting the Fed Chair to take a more hawkish tone.
Traders are also concerned about the economic impact of Hurricane Harvey, which hit the Texas coast over the weekend and caused catastrophic flooding. The storm knocked out several oil refineries along the Gulf Coast.
The dollar index fell 0.54% by mid-morning, at 91.67. The index is at its weakest level in more than two years.
The greenback trimmed some of its losses after a new report indicated that U.S. consumer confidence increased in August, refreshing optimism over the health of the economy.
The euro, meanwhile, gained against the greenback, rising above $1.20 to reach its highest level in more than two years.
The currency was boosted by hopes that the European Central bank will announce plans to taper is stimulus program.
The euro, which is up 14% against the dollar this year, strengthened further after ECB President Mario Draghi’s comments at Jackson Hole. Draghi did not comment on monetary policy nor the recent strength of the euro, which traders interpreted as an indication that the currency would continue to climb.
Against the pound, the euro gained 0.38% to trade at 0.9297. The euro has gained over 9% against the pound this year.
In other currency news, the cryptocurrency collective market cap rose to a new high, above $161 billion for the first time in history.
On the Bitfinex exchange, Bitcoin hit a low of $4,336.7 before recovering slightly and climbing back to $4,360.3. The cryptocurrency has quadrupled in value in 2017, and currently has a market cap of $72 billion.
Bitcoin Cash, a new digital currency, hit a low of $578.01 today after opening at $590.70. The cryptocurrency hit a high of $935.5 on August 19.
Ethereum, the second-largest cryptocurrency, was up 5.86% to trade at $364.11. Litecoin dipped 0.63% to trade at $62.53. The cryptocurrency hit an all-time high of $64.82 on Monday.