There are still several obstacles to clear before a vaccine can be distributed so the vaccine optimism momentum is starting to fade.
Joe Biden’s U.S. presidential election win and a vaccine optimism have combined to propel global stock markets to record highs.
Pfizer Inc PFE.N and BioNTech 22UAy.DE said on Monday their experimental coronavirus vaccine was 90% effective. However, the reaction across financial markets has become more tempered. There are several logistical hurdles to making the drug available, including that it has to be shipped at extremely cold temperatures.
Further, Russia’s Sputnik V vaccine is 92% effective at protecting people from COVID-19 according to interim trial results. Experts said the Russian data was encouraging and reinforced the idea the pandemic could be halted by vaccines. However, they warned that the results were only based on a small number of trial volunteers who had contracted COVID-19.
Several U.S. states on Tuesday imposed restrictions to curb the spread of the coronavirus as hospitalisations soared.
U.S. President-elect Joe Biden will further lay the groundwork for his new administration on Wednesday. President Donald Trump pursues a flurry of longshot lawsuits challenging the election results in an effort to cling to power. Trump’s refusal to accept defeat caps a tumultuous four years in office. The United States has been deeply polarized, ravaged by the coronavirus and torn by racial division.
The Reserve Bank of New Zealand (RBNZ) kept interest rates on hold at 0.25%. New Zealand’s central bank introduced a new monetary policy tool to encourage more loans by reducing borrowing costs for banks.
START TRADINGForex – Vaccine optimism outweighed Brexit deadlock
The biggest mover in the G10 space was the Kiwi dollar. It was last trading up 0.7% on the day at 0.6876. Commodity currencies have been among the week’s top gainers while safe havens are down.
The dollar nursed losses as vaccine optimism was offset by worries about how the drug will be delivered. The dollar index against a basket of six major currencies steadied at 92.741.
The U.S. dollar rose 0.3% to 105.50 versus the Japanese yen.
The Canadian dollar was down 0.2% at 1.3056 against the U.S. dollar.
The New Zealand dollar recovered from an early dip to hit its strongest level in more than a year. Traders scaled back bets that the central bank would move to negative interest rates. The kiwi hit $0.6904, its strongest since March 2019. Against the Australian dollar, the Kiwi strengthened 0.8% to 1.0578.
The Australian dollar fell 0.1% to 0.7276.
The euro hit a six-day low of $1.1756, down 0.5% on the day.
Sterling traded at $1.3258, close to a two-month high due to growing optimism that Britain and the EU will agree on a long-sought-after trade deal. The British currency also hit its highest level in more than two months versus the euro.
The pound was up 0.1% on the day at $1.3291, up more than 1% since Monday.
Versus the euro, it was up around 0.2% at 88.785 pence per euro, having also touched its highest since early September.
Benchmark Brent oil rose to a more than two-month high above $45 a barrel, fuelled by vaccine prospects. Brent futures were up $1.41, or 3.2%, at $45.02. It was the first time they have cleared the $45 threshold since early September.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money