The dollar slipped again for the fifth session in a row. The currency slid to its lowest level for more than a week. This is because positive vaccine news offsets a surge in cases of coronavirus. It still takes time for clinical trials.
The tighter economic restrictions throughout the United States and Europe are also one of the causes. The market is showing a bit more interest in taking risks. It is indicated by an increase in the currency which increases at a time when sentiment is improving.
Some examples of currencies strengthening are sterling, the New Zealand dollar, and the Norwegian crown. In addition, many commodities are also experiencing a volatile phase amid hopes of vaccines and a spike in corona cases. Examples are gold as well as world crude oil.
Vaccines That Show a Lot of Development
As it is known that there are many vaccines developed in different countries. Some have gone through several tests, including being injected into volunteers. In fact, some time ago there were some that had to be stopped because it showed side effects.
However, the vaccine from Pfizer announced that the final results of their late-stage trials showed remarkable results. Research shows that its effectiveness is up to 95%. It is a hope to assuage a market tired of pandemics. Another positive announcement is also following.
Following Pfizer, Moderna Inc also released preliminary data for its vaccine. Their herb shows the effectiveness of up to 94.5%. But neither Pfizer nor Moderna can be mass-produced. It takes a series of clinical trials for several months until it can be declared safe.
It said the global daily death toll reported by the coronavirus reached 10,816 on Tuesday. According to calculations from Reuters, the number of one-day deaths is also the highest so far. This is what is causing shock in the global market.
The United States is the Worst Country
The most severely affected country worldwide is USA. It has reported about 11.38 million infections. That was followed by 248,574 deaths since the pandemic began. These are the situations that have kept their currencies up and down for some time.
The spike in COVID cases is generally good for the dollar and other safe-haven currencies. The examples are the yen and the Swiss franc. However, indeed the news that circulated about the positive vaccine directly denied it. This was conveyed by Greg Anderson.
The dollar as a whole is expected to weaken as the global economy improves. This situation especially after later vaccines is widely distributed. It was also supported by the Federal Reserve, which is poised to deliver more easing. Next, this will erode the greenback value.
Fed Chairman Jerome Powell said there was a "long way to go" toward economic recovery. A retail sales report released by the U.S. Commerce Department also showed slowing spending. In mid-morning trading, the index of USD slipped 0.1% to 92.298.
In addition to the Dollar, Gold is Also Depressed
Gold prices reportedly fell due to optimism about Pfizer's successful vaccine trials battling concerns over rising coronavirus infections. It is also supported by bets for further economic support. Spot gold fell as much as 0.3% to $1,872.38 an ounce today.
U.S. gold futures also slipped as much as 0.6% to $1,873.90. The launch of positive vaccine development reduces the lure of gold as a safe haven. A big hike for the commodity looks like it's coming to an end. This was delivered by Edward Meir.
He is an analyst with ED&F Man Capital Markets. U.S. drug manufacturer Pfizer Inc said it would apply for a U.S. emergency permit after final results from its vaccine trials showed a 95% success rate. The situation should be supported by two months of security data.
