U.S. Dollar Slides On Coronavirus Vaccine Hopes

By | May 18, 2020
InstaForex
U.S

The U.S. dollar depreciated against its most major counterparts in the New York session on Monday, as encouraging results from Moderna’s COVID19 vaccine trial and comments from Fed Chair Jerome Powell lifted sentiment.

Moderna announced positive results from the first human trial of its experimental Covid-19 vaccine, known as mRNA-1273. The company said the vaccination in humans showed immune response.

The company is planning to begin additional trials soon and is aiming to be ready for potential emergency use of its vaccine this fall.

Powell gave an optimistic outlook for economic recovery, saying that a rebound would start to take shape in the second half of the year.

“Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year,” Powell said in an interview with CBS.

The greenback weakened to 5-day lows of 1.0867 against the euro and 0.9689 against the franc, from its early highs of 1.0800 and 0.9732, respectively. The currency is likely to test support around 1.00 against the euro and 0.95 against the franc, if it drops further.

The greenback declined to 1.2209 against the pound, from near a 2-month high of 1.2075 seen at 5:30 pm ET. The greenback is likely to find support around the 1.25 level.

Survey data from IHS Markit showed that UK household finances remained under severe pressure in May.

The Household Finance Index, which measures households’ overall perceptions of financial well-being, came in at 37.8 in May, up only slightly from April’s eight-and-a-half year low of 34.9.

Reversing from its early highs of 1.4115 against the loonie, 0.6410 against the aussie and 0.5924 against the kiwi, the greenback fell to a 6-day low of 1.3997, 5-day lows of 0.6504 and 0.6029, respectively. Next key support for the currency is seen around 1.33 against the loonie, 0.70 against the aussie and 0.62 against the kiwi.

In contrast, the greenback was up against the yen, at a 6-day high of 107.51. On the upside, 110.00 is possibly seen as the next resistance level for the dollar.

Data from the Ministry of Economy, Trade and Industry showed that Japan’s tertiary industry activity declined for the second straight month in March.

Tertiary industry activity decreased 4.2 percent month-on-month in March after easing 0.7 percent in February.


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