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Dollar Retreats Over Positive Vaccine Data, But Will Rise Again with Increasing COVID-19 Numbers

Investing.com
·2-min read

By Gina Lee

Investing.com – The dollar was down on Thursday morning in Asia, retreating on the back of positive results from yet another vaccine candidate for COVID-19.

U.S. Pharmaceutical giant Pfizer (NYSE:PFE) reported results from early stage human trial for BNT162b1, one of four mRNA candidates currently under development by the company and Germany’s BioNTech (NASDAQ:BNTX), on Wednesday. The results indicated the production of neutralizing antibodies in all the patients who were inoculated after 28 days.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.04% to 97.118 by 11:30 PM ET (4:30 AM GMT), with increasing risk appetite leading to investors retreating from the safe-haven asset.

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But some investors predicted gains for the dollar with the ever-rising number of COVID-19 cases globally. There were over 10.6 million cases as of July 2, according to Johns Hopkins University data.

California was the latest state to re-implement lockdown measures on Wednesday to curb the increasing number of cases. With the World Health Organization warning that more countries could be forced to re-instate lockdown measures to curb the number of COVID-19 cases, investors are expected to turn to the greenback as well as the yen again.

"If we see further spikes in coronavirus cases, I would expect both the dollar and the yen to strengthen against other currencies," Tohru Sasaki, head of Japan market research at J.P. Morgan, told Reuters.

The USD/JPY pair was up 0.05% to 107.52.

The AUD/USD pair lost 0.01% to 0.6913, giving up some of its earlier gains. The NZD/USD pair gained 0.15% to 0.6485.

The USD/CNY pair lost 0.01% to 7.0694 and the GBP/USD pair gained 0.09% to 1.2481.

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