The U.S. dollar fell against the Antipodean currencies and the British pound after surprising improvement in U.S. labor market data bolstered expectations for economic recovery, which reduced safe-harbor demand for the greenback.

The Australian and New Zealand dollars both rose to their strongest since January after data showed a smaller-than-expected fall in Chinese exports, which supports commodity currencies.

In contrast, the U.S. dollar traded near its highest in more than two months against the yen, supported by recent gains in long-term Treasury yields as investors await the outcome of a two-day U.S. Federal Reserve meeting ending on Wednesday.

Sentiment has improved dramatically in the currency market as traders focus on signs of a rebound from the coronavirus outbreak as economies reopen from lockdowns, which has hurt the dollar and driven money into so-called risk-on trades.

“Commodities and emerging market currencies are clearly finding it easier to rise against the dollar on hopes of economic recovery, but it is a different story when it comes to the yen,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.

“For dollar/yen the focus is more on yields, which is pushing the currency pair higher.”

Japan’s economy shrank less than initially estimated in the first quarter due to the coronavirus outbreak, revised data showed earlier on Monday, but the yen took the data in its stride.

The Australian dollar traded at $0.6971, approaching its firmest since Jan. 2.

The New Zealand dollar rose to $0.6537, the highest since Jan. 29.

New Zealand has no active cases of Covid-19 in the country for the first time since Feb. 28, the health ministry said in a statement on Monday.

New Zealand will announce later on Monday whether it will remove all remaining social distancing and economic restrictions, barring border controls.

Against the pound, the dollar fell 0.25% to $1.2705 in Asia on Monday, close to its lowest since March 12.

The dollar traded at 109.49 yen, close to a two-month high set on Friday.

Underpinning the dollar was a surprising recovery in U.S. employment in May after the economy suffered record job losses in April, data showed on Friday.

The jobless rate also fell to 13.3% last month from a post-World War Two high of 14.7% in April, offering hope that the world’s largest economy is starting to stabilize after the pandemic triggered a wave of job cuts.

Some investors may avoid making big trades before the Federal Reserve meeting ending on Wednesday to see how Chairman Jerome Powell views a recent rise in 10-year Treasury yields and a steepening in the yield curve.

The onshore yuan was little changed at 7.0863 per dollar after exports from China, the world’s second-largest economy, fell less in May than the market expected, data showed on Sunday.

The pandemic first emerged in China late last year and has caused a sharp contraction in global economic activity, but many traders are now focused on the pace of recovery in the second half of this year.

Some analysts said there are still many risks to the outlook, including diplomatic tension between the United States and China, and the U.S. presidential election later this year.

Net short U.S. dollar positioning fell to $8.17 billion in the week ended June 2 from $8.6 billion the previous week, according to U.S. Commodity Futures Trading Commission data released on Friday, which may discourage some investors from selling the dollar further.

The euro traded at $1.1296 in Asia on Monday. The common currency is riding a wave of optimism after the European Central Bank said last week it will increase bond purchases to help the bloc’s weakest economies.

Sentiment will face a test later on Monday with the release of data forecast to show that German industrial output fell the most on record in April.