The dollar was buoyant on Tuesday, pushing the euro to a four-month low, as a run of strong U.S. job figures solidified expectations the U.S. Federal Reserve could soon start tapering its massive coronavirus-driven stimulus.
The prospect of the Fed’s reduced bond-buying pushed down U.S. bond prices, lifting their yields and hitting other safe-haven assets that had benefited from low returns from U.S. debt, such as the Swiss franc and gold.
The Swiss franc has lost about 1.6% over the last two sessions against the dollar to trade at 0.9196 franc to the dollar.
The franc weakened even against the single currency to 1.08045 per euro, reversing its rise earlier this month to a nine-month high of 1.0720.
Gold licked its wounds at $1,736.5 per ounce, having lost 4% in the last two sessions and briefly falling to as low as $1,667.6 on Monday, its weakest since April 2020.
The euro slipped to a four-month low of $1.1732 and last stood at $1.1739.
“The market is repricing the Fed’s tapering. It has only begun and I expect market adjustment to continue. The market will likely test the euro’s low so far this year (of $1.1704 marked on March 31),” said Jun Arachi, senior strategist at Rakuten Securities.