Dollar Loses Ground As Risk Sentiment Improves After Vaccine Rollout
The U.S. dollar was weak against most of its peers on Monday as risk sentiment improved following the rollout of coronavirus vaccine, and on hopes of a fiscal stimulus in the U.S.
According to reports, the United States has begun giving Covid-19 vaccine shots and vaccinations were rolling out across the country starting Monday, with hospitals prioritizing front-line healthcare workers.
This follows the Centers for Disease Control and Prevention’s nod for Pfizer-BioNTech’s COVID-19 vaccine.
CDC Director Robert Redfield accepted the recommendation by CDC’s Advisory Committee on Immunization Practices for vaccination with the Pfizer-BioNTech COVID-19 vaccine in people 16 years of age and older.
The recommendation follows the Emergency Use Authorization issued by the U.S. Food and Drug Administration for the vaccine last Friday.
Investors were also looking ahead to the upcoming monetary policy meeting of the U.S. Federal Reserve. The Fed’s two-day monetary policy meeting starts on December 15.
The dollar index, which fell to 90.42 in the European session, recovered subsequently and was last seen at 90.68, but was still down in the red, giving up about 0.33% from previous close.
The Euro was stronger by about 0.3% against the dollar, fetching $1.2148 compared to Friday’s close of $1.2112.
The Pound Sterling was up sharply, fetching $1.3324 a unit, nearly 0.75% up from previous close of $1.3227. The pound gained ground against its peers, as U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen had agreed to continue talks beyond Sunday’s deadline in an attempt to reach a post-Brexit trade deal before the end of the year.
Johnson and von der Leyen agreed to “go the extra mile” and told their negotiating teams to resume the talks in Brussels.
European Union Brexit negotiator, Michel Barnier, said that a deal is “still possible” as both sides attempt to break deadlock on issues related to competition rules and fishing rights.
The Yen was flat at 104.01 a dollar a little while ago, weakening from 103.52.
The AUD-USD pair was flat at 0.7533 after having surged up to 0.7578 earlier.
The Swiss franc firmed up to 0.8868 from 0.8902, while the Loonie was slightly up at CHF 1.2762 a dollar.