Vaccine Optimism and Weak Economic Data Pressure US Dollar
Arslan Butt • 1 min read
The US dollar is trading bearish on Thursday, weakened by disappointing economic data releases and suffering as a safe haven currency amid optimism among traders about possible vaccines to combat the COVID-19 pandemic. At the time of writing, the US dollar index DXY is trading around 91.91.
The reserve currency’s appeal has been diminishing over recent sessions ever since Pfizer announced that its vaccine was 90% effective against COVID-19. The mood in the markets was boosted even further as this news was followed by promising reports about vaccines by Moderna and then AstraZeneca as well.
The risk-on sentiment has sent the GBP and the EUR to an over two-month high against the US dollar. Emerging market currencies have also been making strong gains against the greenback lately, buoyed by vaccine optimism.
The US dollar turned even weaker during the previous session following the release of the latest weekly jobless claims figure. The latest report revealed that unemployment claims in the US increased by 778k over the previous week even as personal incomes declined.