Australian Dollar Rises, U.S. Dollar Falls On Vaccine Hopes

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The Australian dollar gained ground in the Asian session on Monday, while the safe haven U.S. dollar and the yen dropped, as hopes for a coronavirus vaccine boosted risk sentiment.

Asian stock markets rose following the positive cues from Wall Street Friday as encouraging results from Gilead Sciences’ antiviral drug remdesivir helped offset worries about the surge in new coronavirus cases worldwide.

Gilead Sciences reported that remdesivir showed a 62 percent reduction in the risk of mortality compared with the ordinary standard of care.

Traders are also looking ahead to the corporate earnings season that begins this week.

Australia’s Treasurer Josh Frydenberg said that the nation’s unemployment rate is expected to rise amid the economic challenges

The effective unemployment rate is about 13.3 percent, while the current official rate is 7.1 percent, he told reporters. “That is a large number of people reflecting the economic challenges that we see right now.”

The aussie edged higher to 74.66 against the yen, 1.6223 against the euro and 0.9470 against the loonie, from its early lows of 74.19, 1.6288 and 0.9437, respectively. The aussie may face resistance around 76.00 against the yen, 1.58 against the euro and 0.96 against the loonie, should it rallies again.

The aussie appreciated to 4-day highs of 0.6984 against the greenback and 1.0620 against the kiwi, off its early low of 0.6940 and near a 3-month low of 1.0564, respectively. Next key resistance for the aussie is seen around 0.72 against the greenback and 1.08 against the kiwi.

The greenback dropped to 4-day lows of 1.1336 against the euro, 1.2666 against the pound and 1.3555 against the loonie, after rising to 1.1302, 1.2612 and 1.3602, respectively in early deals. The greenback is seen finding support around 1.16 against the euro, 1.29 against the pound and 1.33 against the loonie.

The greenback reversed from an early high of 0.9410 against the franc, dropping to 0.9392. On the downside, 0.92 is possibly seen as its next support level.

The yen dropped to 4-day lows of 135.42 against the pound and 121.21 against the euro, reversing from its early highs of 134.89 and 120.79, respectively. If the yen falls further, 137.00 and 123.00 are likely seen as its next possible support levels against the pound and the euro, respectively.

The yen edged down 107.00 against the greenback, 113.84 against the franc and 78.89 against the loonie, following a gain to 106.79, 113.50 and 78.59, respectively in early deals. The yen is poised to face support around 109.5 against the greenback, 116.00 against the franc and 81.5 against the loonie.

Looking ahead, U.S. monthly budget statement for June will be featured in the New York session.

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