Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Up, With Investors Adjusting Vaccine Expectations

Forex Nov 11, 2020 09:18PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia, with investors adjusting earlier bullish expectations for a COVID-19 vaccine. This adjustment tempered the risk assets rally triggered by the vaccine expectations while maintaining enough confidence to support the greenback against other safe-haven assets.

The U.S. Dollar Index Futures that tracks the greenback against a basket of other currencies inched up 0.01% to 92.972 by 10:10 PM ET (2:10 AM GMT). Pfizer Inc's (NYSE:PFE) announcement of positive results for the vaccine candidate that it is co-developing with BioNTech (F:22UAy) earlier in the week saw the dollar fall more than 10% from a March peak to a 10-week low. A selloff of safe-haven assets since then boosted the dollar’s nearly-1% rally to just below the one-week high hit during the previous session.

However, a sharp decline in U.S. bond yields, as well as the Federal Reserve’s policy of an extended period of low rates and hopes for a global economic recovery from COVID-19 that would boost other currencies could contribute to further decline in the dollar.

This means that new drivers might now need to be sought to prevent the dollar falling any lower, OCBC strategist Terence Wu said in a note.

“With the broad dollar in a consolidative mode, the posture for the USD/CNH pair may also be sideways in the near-term. These factors play into limited downside for USD-Asian pairs in the near-term,” the note added.

Other investors espoused a more optimistic view.

“I think we had a speculative market that was increasingly comfortable being short on U.S. dollars. Then we had the vaccine news and a big spike in U.S. bond yields, which I think just acted as a little bit of a check on unbridled U.S. dollar bearishness. A lot of positions probably got squeezed. I think it was a condition of the market rather than a strong fundamental response or a change of thinking about the dollar,” National Australia Bank (OTC:NABZY) head of foreign exchange strategy Ray Attril told Reuters.

The USD/JPY pair edged down 0.13% to 105.28. The yen was around 2% below the eight-month high it saw against the dollar during the previous week, after U.S. president-elect Joe Biden took the lead in the presidential election, spurring a dollar sell-off.

The USD/CNY edged down 0.17% to 6.6190. Tensions between the U.S. and China rose over the National People’s Congress Standing Committee (NPCSC)’s Wednesday resolution disqualifying any lawmakers in Hong Kong's Legislative Council deemed insufficiently patriotic without going through the city’s courts. The immediate removal of four opposition legislators triggered the resignation of the fifteen remaining opposition legislators later in the day. National Security Advisor Robert O’Brien warned that the U.S. would “continue to utilize all the powers granted” under various laws and “identify and sanction those responsible for extinguishing Hong Kong’s freedom.”

The NZD/USD pair was up 0.23% to 0.6897. The NZD saw gains as the Reserve Bank of New Zealand (RBNZ) adjusted its “unconstrained” cash rate projection upwards due to a better-than-expected economic performance and tempering expectations of negative rates.

"Less stimulus is required than we thought in August, but still a substantial amount of stimulus," RBNZ Assistant Governor Christian Hawkesby told Bloomberg.

The AUD/USD pair inched up 0.05% to 0.7282. The AUD also saw a six-month low against the NZD after the RBNZ adjustment. “The pair looks heavy and at risk of further downside,” Pepperstone head of research Chris Weston told Reuters.

The GBP/USD pair inched down 0.02% to 1.3219, as Brexit trade talks between the U.K. and the European Union drag on.

Dollar Up, With Investors Adjusting Vaccine Expectations
 

Related Articles

Dollar Edges Higher; Sterling Weak After GDP Fall
Dollar Edges Higher; Sterling Weak After GDP Fall By Investing.com - Aug 12, 2022 3

By Peter Nurse Investing.com - The U.S. dollar edged higher in early European trade Friday, rebounding to a degree after a two-day selloff as weaker than expected inflation data...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Jared Ryan
Jared Ryan Nov 11, 2020 9:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
slow down Joe, Trump going to end up winning
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email