Dollar Retreats After Early Uptick, Stays Largely Sluggish

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After showing modest strength early on in the session, the U.S. dollar retreated and largely stayed sluggish on Tuesday as riskier currencies found some support amid optimism about a potential coronavirus vaccine.

Expectations that the U.S. government will announce a stimulus sometime in the foreseeable future contributed as well to the modest dip in demand for greeback.

Drugmaker Pfizer reported that its Covid-19 vaccine was found to be over 90% effective in preventing Covid-19 in a large-scale clinical trial.

The vaccine hopes revived investor appetite and helped offset concerns over rising coronavirus cases in the US and Europe.

The dollar index, which fell to 92.60 in the Asian session, rebounded swiftly to 92.97, but turned sluggish subsequently and was last seen at 92.77, up just marginally from previous close.

Against the Euro, the dollar was roughly flat at 1.1813, easing from $1.1780 it had touched in the Asian session.

The Pound Sterling was stronger, fetching $1.3269, about 0.8% more than Monday’s close of $1.3164. Data from the Office for National Statistics showed that the UK unemployment rate increased in the third quarter and redundancies reached a record high.

The ILO jobless rate rose by 0.7 percentage points from the previous quarter to 4.8% in three months to September, as economists’ expected. The employment rate dropped by 0.6% from the preceding quarter to 75.3%.

The Yen firmed up to 105.27 a dollar, adding 0.12% from previous close of 105.39 a dollar, after survey data from the Cabinet Office showed that a measure of the public assessment of the Japanese economy increased further in October.

The Aussie was flat against the dollar with the pair trading at 0.7283.

The Swiss franc was weaker by about 0.25% at 0.9153 a dollar, while the Loonie was trading at 1.3023 a dollar, weakening from 1.3007 Monday evening.

The material has been provided by InstaForex Company – www.instaforex.com

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