Forex Signals – Dollar Retreats Amid Investor Hopes for Potential Vaccine
FxPremiere.com – The dollar was down on Tuesday morning in Asia after U.S. drugmaker Moderna (NASDAQ:MRNA) announced “positive” results for its potential COVID-19 vaccine on Monday.
The U.S. Dollar Index . Investors retreated from the safe-haven asset with the news increasing their risk appetite.
“Volatility is falling for stocks and dollar-funding costs are lower. It’s easy for the dollar to fall and for other currencies to ride the dollar’s losses higher.”
The AUD/USD pair gained 0.04% to 0.6525. The USD/CNY pair was up 0.01% to 7.1096 and the GBP/USD pair gained 0.07% to 1.2197
The Australian dollar’s turnaround signals the start of a recovery that may see it rally to 70 U.S. cents by year-end, according to Insight Investment.
An early start to rebooting the economy and a rebound in commodities will support the Aussie, says Adam Kibble, investment specialist at Insight. Nation aims to restart its economy by July under a three-part plan that puts it ahead of developed markets.
Australia is set to recoup about 60% of monthly gross domestic product at the final stage of the government’s plan to fully relax restrictions, according to Bloomberg Economics. The central bank predicts the economy will contract 10% from peak-to-trough this year.
Australia’s biggest trading partner is “further down the recovery path and has started to see some degree of normalization in the economic activity,” Kibble wrote in a report. The Australian government has unveiled one of the “most aggressive” policy responses among Group-of-10 peers with an A$130 billion ($83.7 billion) rescue plan, and any sell-off may be an opportunity to buy, Kibble said.
Dollar Retreats Amid Investor Hopes for Potential Vaccine.