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Covid-19 vaccine developments pushing US dollar lower

Covid-19 vaccine developments pushing US dollar lower

The US currency continued to weaken on Monday as promising news on coronavirus vaccine rollouts have been weighing on the greenback. Experts say that traders’ appetite for riskier assets is growing.

The dollar was trading down 0.1 percent versus a basket of currencies at 92.234, dropping to a two-and-a-half-year low.

“Markets are following pandemic news at the moment – vaccine optimism seems to be supporting risk assets for the time being,” chief economist at UBS Global Wealth Management Paul Donovan was quoted as saying in a note to clients.

The British drugmaker AstraZeneca said on Monday its vaccine could be around 90 percent effective as late-stage trials showed. The company said it will prepare submission of data to authorities around the world that have a framework for conditional or early approval.

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The announcement follows a string of positive vaccine developments by other global drugmakers. Earlier this month US-based biotechnology company Moderna said its experimental vaccine was 94.5 percent effective in preventing Covid-19, based on interim data from a late-stage clinical trial. A rival vaccine by US-based Pfizer and German firm BioNTech was found to have efficacy of 90 percent, while the developers of Russia’s Sputnik V vaccine reported a 92 percent efficacy.

Citibank warned last week that the widespread distribution of vaccines to combat the coronavirus pandemic and ongoing monetary easing could lead to the US dollar weakening as much as 20 percent next year.

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