US Dollar sinks to two-year lows as Brexit hope lifts Sterling

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US Dollar sinks to two-year lows as Brexit hope lifts Sterling

On Monday, the American Dollar Index (DXY) measured against a basket of six major currencies on an average tumbled to its lowest level in more than two years to 90.41, as a raft of riskier currencies had regained traction following an improvement of risk-appetite.

In point of fact, Monday’s FX market was almost entirely galvanized by a swathe of key fundamentals such as a kickstart of a vaccination campaign in the United States alongside rekindled hopes over a Brexit deal. Aside from that, waning possibilities of a pandemic relief bill in the United States kept appetites for the riskier assets at bay.

More importantly, Pfizer Inc. was quoted saying in a statement ahead of the rollout of its pandemic vaccine candidate over the weekend that the US drugmaker was looking to inoculate as many as 2.9 million people this year, while the American biopharmaceutical’s pandemic vaccine candidate which it had developed in collaboration with its German peer BioNTech, has been expected to vaccinate as many as 100 million Americans by late-March, a third of the United States’ entire population, eventually spurring up the hopes of a quicker-than-anticipated economic recovery.

In tandem, over the Brexit front, hopes of an eleventh-hour post-Brexit settlement deal between EU and UK revived earlier in the day after the EU Chief Ursula von der Leyen had been quoted saying that the leaders of EU Commission and UK had been making progresses over a potential post-Brexit deal.

US Dollar fell to lowest since April 2018

Citing statistics, in the day’s FX market closure, the US Dollar Index (DXY) tumbled 0.30 per cent to 90.71 after hitting a session low of 90.41 earlier in the day, its lowest level since April 2018, while the British currency gained 0.79 per cent against its American peer to $1.3133.

Concomitantly, the bloc’s common currency euro added 0.31 per cent against the greenback to $1.2146, while the Australian Dollar, a closely monitored proxy for market risks, ended the day 0.07 per cent higher against its American counterpart to $0.7539.

Meanwhile, addressing to a growing uncertainty over a much-needed US stimulus bill, a Senior Market Analyst at FX brokerage firm OANDA, Ed Moya said, “I think you’re going to have some optimism that maybe we’re going to be able to get some relief push through. And that is going to be very negative for the dollar.