Dollar Up Despite Vaccine Approval

Fx Signals FxPremiere.com – The dollar was up on Thursday morning in Asia, reversing its earlier downward trend even as the possibility of U.S. economic stimulus measures and the first approval of a COVID-19 vaccine increased investors’ risk appetites.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.04% to 91.037 by 9:58 PM ET (1:58 AM GMT).

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Although Republicans and Democrats in Congress have yet to reach agreement over the latest stimulus measures’ price tag, investors remained optimistic that a $908 billion bipartisan proposal is slowly gaining traction.

FOREX – U.S. Dollar Down Amid Improved

Congress has until Dec. 11 to pass the $1.4 trillion budget or risk a government shutdown, adding a big incentive to reach a deal before the deadline.

Pound Rises as Vaccine Progress

Across the Atlantic, the U.K. became the first country to approve a COVID-19 vaccine, the BNT162b2 candidate jointly developed by Pfizer Inc (NYSE:PFE) and BioNTech SE (F:22UAy), on Wednesday. Inoculation of those most as risk is expected to begin early in the following week.

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Dollar loses out on growing optimism about virus vaccine

“On the whole, the new U.S. economic team under President Biden will be dovish, if not directly pursing a weaker dollar per se … the next target for the euro should be its February 2018 peak of $1.2555.

The USD/JPY pair inched up 0.10% to 104.50. Japan’s services Purchasing Managers’ Index (PMI) came in at 47.8 in November, little changed from October’s figure of 47.7.

The AUD/USD pair edged down 0.17% to 0.7402. The AUD saw a 26-month high overnight as investors digested Wednesday’s positive data, including GDP, that showed that the Australian economy saw a stronger-than-expected bounce back in the third quarter. Across the Tasman Sea, the NZD/USD pair edged down 0.11% to 0.7061.

Dollar Down as Vaccine Optimism

The USD/CNY pair edged down 0.12% to 6.5547. China released November’s Caixin services PMI which beat expectations by coming in at 57.8.

Dollar Weakens on Vaccine

Investors are also looking at the offshore yuan, which saw a two and a half year high in November and continues to maintain its strength over expectations that U.S. President-elect Joe Biden’s administration will be more conducive to Chinese economic growth.

GPB/USD Firms Could Reach 1.35USD

The GBP/USD pair inched up 0.03% to 1.3367. The pound was hovering near a three-month high, after trading unevenly during the previous session as Brexit talks between the U.K. and the European Union.