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US Dollar Trades Cautious – Vaccine Optimism Offset by Pandemic’s Economic Impact

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.

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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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