US Dollar Under Pressure as Vaccine Optimism Fades

US Dollar Under Pressure as Vaccine Optimism Fades

Posted Wednesday, November 11, 2020 by
Arslan Butt • 1 min read

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.

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