USD Down as Covid-19 Vaccine Optimism Raises Risk Appetite

USD Down as Covid-19 Vaccince Optimism Raises Risk Appetite

USD Down – Investors Switch to Riskier Assers


USD was down in Asia on Wednesday morning, as investors switched to riskier assets after growing optimism about a global economic recovery following raised optimism for Covid-19 Vaccine.  Markets, however, saw minor moves overall.

For the first time during the previous session, the optimism, sparked by the prospect of a COVID-19 vaccine being available soon and clarification about the new U.S. presidential administration, saw the Dow Jones Industrial Average rising above 30,000. On Wednesday, Asia Pacific shares were up.

With AstraZeneca PLC reporting positive results on Monday for its candidate AZD 1222, and candidates from Pfizer Inc and Moderna Inc reporting positive results over the past two weeks, there is an increasing hope that a vaccine will be available in the near future.

The administration of incumbent President Donald Trump has reluctantly started cooperating with the administration of President-elect Joe Biden for a smooth transition, adding to the optimism. Trump has however, given no indication that he will stop the legal challenges he has raised against the results of the presidential elections.

With a vaccine and the likely appointment of former Federal Reserve Chairman Janet Yellen, a vocal advocate for higher fiscal spending, as Biden’s Treasury Secretary removes two major investor uncertainties, the decline of the dollar only seems likely to continue in the short term as its attractiveness as a safe harbour currency is diminished.

“Rising yields may give some support to the dollar, but it will head in a lower direction,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities, told Reuters.

Risk Assets


The trend has shifted towards the promotion of risk assets. Yellen is going to team up with the Fed and promote the economy. For a long time, U.S. rates will remain low,” added Ishikawa.

Cryptocurrency bitcoin, related to extreme volatility, trading near an all-time high, was another indication of the increased risk appetite. To 104.54, the USD/JPY pair inched 0.10 percent.

The AUD/USD pair decreased by 0.02% to 0.7359, giving up earlier gains, while the NZD/USD pair increased by 0.08% to 0.6985. In both Australia and New Zealand, investors unwound bets for additional monetary easing, giving the Antipodean currencies an added boost. Last seen on Sep. 1, the AUD moved towards a high of $0.7413, while the NZD traded slightly below its strongest level since June 2018 and has risen 5.6 percent in November so far.

The USD/CNY pair edged down to 6,5779 by 0.18 percent. Under the Biden administration, the onshore yuan rose over hopes of better U.S.-China relations.

The GBP/USD pair increased 0.02 percent to 1.3359, with the pound trading in more than two months near to its highest level. Later in the day, ahead of Thursday’s Thanksgiving holiday, the U.S. will release a slew of data. These include the minutes of the most recent Federal Free Market Committee conference, U.S. jobless claims and GDP data from the Federal Reserve.

Dont miss BioNTech/Pfizer makes an attractive Investment during Covid.

To find the best stocks and trading and financial news, check out Bitcoin Investment News. Make sure to also keep tabs on Crypto Asset’s guides and news.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>


Don't Miss Out on Our Business Resources
Get the latest business resources on the market delivered to you weekly.