U.S. Dollar Slides On Coronavirus Vaccine Hopes
May 18 2020 - 6:12AM
RTTF2
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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