On Wednesday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average spanned its rally to wrap up the day 0.28 per cent higher to 92.92, while the safe-haven Japanese Yuan slumped to its three-week low against the greenback, as investors were found to be still gauging the impacts of a Biden victory announced over the weekend alongside prospects of a “V” shaped economic recovery following encouraging signs of a pandemic vaccine.
In point of fact, the US Dollar Index faltered more than 1.5 per cent since the November 3 US Presidential election over growing bets on a Biden victory alongside possibilities of a large-scale stimulus bill, though Wednesday’s FX market had witnessed a return of safe-haven appeal for the American currency as the bloc’s common currency euro fell to a nearly one-week low despite possibilities of a rate-hike in December since a growing grudge over rising pandemic cases across Europe and the United States appeared to be denting market optimisms seen earlier this week.
Aside from that, the New Zealand Dollar spiked to its highest level in more than a year and a half earlier in the Asia-Pacific trading hour as investors had scaled down their bets on a negative interest rate from the Kiwi Central Bank over a plausible economic rebound.
US dollar regains safe-haven bid on uncertainties over vaccine approval process
Quoting statistics, on Wednesday’s FX market wind down, US Dollar Index rose .28 per cent to 92.92, while the bloc’s common currency euro fell 0.3 per cent to $1.177 against its American counterpart.
Besides, the American currency gained 0.3 per cent to 105.46 yen per Dollar against safe-haven Japanese Yen, while the commodity-sensitive loonies such as Norwegian Krona alongside Canadian dollar fell 0.7 per cent and 0.2 per cent respectively despite a buoyant crude oil futures’ price.
Meanwhile, citing uncertainties over a vaccine certification process following Biden’s commitment to scientific methodology during introducing a vaccine despite soaring pandemic cases across the globe, a head of G10 FX strategy at CIBC Capital Markets, Jeremy Stretch said, “The (vaccine) news is undoubtedly positive, but of course we need to delve into the detail and think about the ramifications of the whole process. We need to remember that this is a vaccine which is unproven in terms of certification”.