Dollar Retreats Amid Investor Hopes for Potential Vaccine
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.
All 45 phase one trial participants developed antibodies to the virus after two doses.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies slid 0.01% to 99.672 by 12:14 AM ET (5:14 AM GMT). Investors retreated from the safe-haven asset with the news increasing their risk appetite.
“There has been a big improvement in risk sentiment because of hopes for a vaccine,” said Junichi Ishikwa, senior FX strategist at IG Securities, told CNBC.
“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.”
Meanwhile, U.S. Federal Reserve Chair Jerome Powell is scheduled to speak on the state of U.S. economic recovery from the virus on Tuesday, where he is expected to press for future fiscal support.
The USD/JPY pair rose 0.06% to 107.40 as investors wait for Japanese industrial production data for March to be released later in the day.
A data release from Monday showed the Japanese economy shrinking at an annualized rate of 3.4% between January and March.
The AUD/USD pair gained 0.04% to 0.6525. Australia’s central bank released the minutes from its May monetary policy meeting earlier in the day, which stated that the board “would not increase the cash rate target until progress is made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target band.”
The NZD/USD jumped 0.12% to 0.6045 after Reserve Bank of New Zealand Deputy Governor Geoff Bascand said in an interview that the bank would re-evaluate its monetary easing in about three months’ time to determine whether “to do more or take the foot off the pedal a little bit.”