As a new trading week gets underway, the US dollar is trading somewhat cautious as worries about the economic impact of the pandemic get offset by rising hopes for a speedy rollout of the vaccines. At the time of writing, the US dollar index DXY is trading around 92.24.
Moves in the US dollar and the forex market also remain muted owing to thin liquidity due to a holiday in Japanese markets on Monday. The dollar is weakening against the Japanese yen while the Euro is holding steady under a key resistance level against the reserve currency.
The safe haven appeal of the greenback came under pressure as traders focused on the possibility of the vaccines against COVID-19 clearing regulatory hurdles in an expedited manner and being distributed soon. Latest news reports suggest that healthcare workers in the US could start receiving shots by as soon as mid-December after getting FDA’s approval.
However, worries about the spread of the pandemic and the possibility of further economic damage are also weighing on markets. Traders worry about the possibility of a sharp spike in cases in the US after the upcoming Thanksgiving holiday even as news reports suggest that Germany could extend its lockdown until mid-December.