From Gina Lee
Investing.com – The dollar fell in Asia on Wednesday morning after investors turned to riskier assets amid increasing optimism about a global economic recovery. However, the markets recorded small movements overall.
The optimism sparked by the possibility of a soon-to-be-available COVID-19 vaccine and the clarity of the future U.S. presidential administration resulted in a surge above 30,000 for the first time in the previous session. Asia Pacific stocks rose on Wednesday.
The greenback against a basket of other currencies fell 0.17% to 92.067 by 11:55 p.m. ET (03:55 p.m. GMT). The dollar fell to nearly two month lows against the riskier AUD and NZD and nearly two week lows against the euro.
AstraZeneca PLC (LON 🙂 reported positive results for its candidate AZD 1222 and candidate from on Monday Pfizer Inc (NYSE 🙂 and Moderna Inc (NASDAQ 🙂 has also reported positive results in the past two weeks. Hopes are growing that a vaccine will soon be available.
Incumbent President Donald Trump reluctantly begins to work with the administration of President-elect Joe Biden to ensure a smooth transition, adding to optimism. However, Trump has given no indication that he will end the legal challenges he has posed against the results of the presidential election.
With a vaccine and the likely appointment of former Federal Reserve Chair Janet Yellen, who is clamoring for more budget spending, as Biden's Treasury Secretary clearing two major uncertainties for investors, the dollar's decline should only continue for a short-term period of appeal as a safe haven currency is declining.
"Rising yields may give the dollar some support, but the general direction is that it is going down," Junichi Ishikawa, senior foreign exchange strategist at IG Securities, told Reuters.
“The trend has shifted to favor risk-weighted assets. Yellen will team up with the Fed and support the economy. US rates will remain low for a long time, ”added Ishikawa.
Another indication of the increased risk appetite was Bitcoin in cryptocurrency, which was associated with extreme volatility and was trading near an all-time high.
The pair rose 0.10% to 104.54.
The pair was down 0.02% to 0.7359 and abandoned previous gains while the pair was down 0.08% to 0.6985. Investors have placed bets on further monetary easing in both Australia and New Zealand, giving the antipodal currencies an extra boost. The AUD moved towards a high of $ 0.7413 last seen on September 1, while the NZD was trading slightly below its strongest level since June 2018, up 5.6% so far in November.
The pair was down 0.18% to 6.5779. The onshore yuan rose in hopes of better US-China ties under the Biden administration.
The pair rose 0.02% to 1.3359, with sterling trading near its highest level in more than two months.
The US will release a range of data later on the day before Thursday's Thanksgiving Day. This includes the Federal Reserve's minutes of the last Federal Open Market Committee meeting, the US, and dates.
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