US Dollar Under Pressure as Vaccine Optimism Fades

The US dollar is on a bearish track in early trading on Wednesday after the optimism surrounding Pfizer‘s vaccine gave way to rising concerns about its rollout even as the number of fresh infections across the country continue to climb higher. At the time of writing, the US dollar index DXY is trading around 92.71.

The news about Pfizer’s COVID-19 vaccine has boosted the risk sentiment in global financial markets and also supported the dollar’s strengthening in the previous session. However, traders are now focused on the challenges involved in production and distribution of this vaccine, and how long it could take for the rollout to begin.

The US dollar has weakened against the safe haven Japanese yen over these concerns, and has also lost ground against the GBP, which has made gains over optimism about Britain and the EU working out a trade deal soon. The NZD, which had dipped against the greenback earlier in the session after the RBNZ statement, has also bounced back and is trading at the highest level seen in over a year.

A continued rise in the number of fresh cases of coronavirus across the country is also exerting downward pressure on the US dollar. With winter approaching, the number of hospitalizations have also surged and has traders worried about whether the US can successfully contain the second wave of the pandemic.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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