US Dollar Weakens Amid an Improvement in Risk Sentiment
Arslan Butt • 1 min read
The US dollar has weakened against other major currencies amid refreshed expectations for a vaccine to combat the coronavirus pandemic even as key corporate deals boosted the sentiment and sent investors towards riskier instruments. At the time of writing, the US dollar index DXY is trading around 92.87.
After regaining some of its strength over the past few sessions, the US dollar has fallen below a one-month high while the Euro continues to make gains. The mood in the markets was lifted over reports that AstraZeneca was set to resume phase three of its trials for a COVID-19 vaccine, raising hopes for the pandemic to be brought under control soon.
Meanwhile, Wall Street traded bullish on Monday over a few big corporate deals, including Nvidia’a acquisition of chip designer Arm and Oracle striking a deal with Chinese company ByteDance for popular app TikTok. These deals revived investor confidence and dented the safe haven appeal of the greenback.
Later this week, the US dollar could see some moves after the Fed’s policy meeting on Wednesday. This last meeting before the presidential elections will be of interest especially to gain a better understanding of the Fed’s new shift in policy towards average inflation.