Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Weakens as Stimulus/Vaccine Confidence Grows

ForexDec 09, 2020 03:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - The dollar weakened in early European trade Wednesday, with growing confidence surrounding U.S. fiscal stimulus and the vaccine rollout prompting traders to seek out riskier currencies.

At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 90.812, still only slightly above the recent 2 1/2-year low of 90.471.

EUR/USD edged 0.3% higher to 1.2132, but off the Friday’s high of 1.2177, a level last seen in April 2018, USD/JPY rose 0.1% to 104.23, while the risk-sensitive AUD/USD was up 0.5% at 0.7445.

On Tuesday, Treasury Secretary Steven Mnuchin proposed a package of relief measures with a sticker price of $916 billion, fractionally more than the $908 billion package proposed by a bipartisan group of lawmakers last week. That increases the pressure on Senate Leader Mitch McConnell, who continues to reject any bill that includes help specifically for state and municipal governments, to drop his opposition.

Adding to the general air of optimism, hitting the safe haven dollar, was a Food and Drug Administration data dump flagging no new safety or efficacy concerns over the Pfixer/BioNTech Covid-19 vaccine, implying it will be approved for use in America when the administration meets on Thursday. The U.K. has already started vaccinating its population with this drug.

Elsewhere, GBP/USD rose 0.2% to 1.3382, with U.K. Prime Minister Boris Johnson set to have dinner with European Commission President Ursula von der Leyen later Wednesday, to try and find solutions to the remaining issues stopping holding up a post-Brexit trade agreement.

News on Tuesday that the U.K. government has dropped controversial clauses in its U.K. Internal Market Bill has helped the tone, being seen as a sign that the U.K. wants a deal more than Johnson is admitting. 

The focus is also on the European Central Bank, as it’s widely expected to increase the size and scope of its bond-buying program when its governing council gets together for the final policy-making meeting of the year on Thursday. 

Investors will also be looking to see what the central bank will do or say about the euro, which has already gained 8% in 2020 and remains well above the $1.20 level which had previously been seen as a form of pain threshold.

“Given non-negligible market expectations of further ECB easing and the structural USD decline in place, it will be difficult for the ECB to lean against the wind and tame the euro upside,” said analysts at ING, in a research note.

In Asia ovenight, meanwhile, the offshore yuan breached the 6.50 level against the dollar for the first time in two and a half years after reports that President-elect Joe Biden had dismissed talk of pursuing a decoupling of the U.S. and Chinese economies. It didn't hold below that level, however.

Dollar Weakens as Stimulus/Vaccine Confidence Grows
 

Related Articles

Musk tweets, dogecoin leaps and bitcoin retreats
Musk tweets, dogecoin leaps and bitcoin retreats By Reuters - May 14, 2021 1

By Tom Wilson and Tom Westbrook LONDON/SINGAPORE (Reuters) -Bitcoin was heading on Friday for its worst week since February, while dogecoin leapt by a quarter, as the latest...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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 (5)
Yee Show Mee
Yee Show Mee Dec 09, 2020 6:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Six people died in Pfizer’s late-stage trial of the COVID-19 vaccine today news but FDA deny
Samui Lo
Samui Lo Dec 09, 2020 5:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Vaccine rollout everybody already knew about, stocks go up, allergic reactions nobody knew about...stocks go up regardless
Samui Lo
Samui Lo Dec 09, 2020 5:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Confidence "grows" from already... all the time highs? just how confident are people Lol
Francisco Botet
Francisco Botet Dec 09, 2020 5:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Where’s the vacccine alert for alergic people news? Everything is manipulated at stocks, including news.Do you know vaccine only avoid symptoms and not trasmission?
Lordlove Ndlovu
SomawebGlobe Dec 09, 2020 4:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Could it be good news for developing Markets
 
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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email