The U.S. Dollar Fell While the Euro Gained on Thursday

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The U.S. Dollar Fell While the Euro Gained on Thursday

The U.S. dollar tumbled down on Thursday as investors wavered between caution and optimism. Despite positive expectations about the coronavirus vaccine, it is unlikely to avoid a hard winter in the United States and Europe as the pandemic’s second wave intensifies.

The dollar index lowered by 0.15% in London on Thursday. Meanwhile, the risk-sensitive Australian and New Zealand dollars recovered slightly, at last trading only approximately 0.1% lower. After dropping initially, the Euro climbed up by 0.3% to $1.1823.

Jane Foley, the head of FX strategy at Rabobank, stated that activity in euro/dollar was a little lighter yesterday. She suggested that the Euro is trying to find its feet following the U.S. elections and after the vaccine-related storm of activity at the start of the week.

Furthermore, in the run-up to the ECB meeting in December, the market may feel a little uncomfortable with long positions on the Euro, – added Foley.

Europe is struggling with surging infections and new restrictions. Germany’s economic advisers have already trimmed next year’s growth outlook. Meanwhile, New York ordered restaurants and bars to close early as cases hit record levels in the United States. 

How did the British Pound fare?

The Sterling lowered as trade talks between Britain, and the European Union continues to drag on past another deadline. Traders fear that a trade deal may not be reached before Brexit transition arrangements end on Dec. 31. The British Pound tumbled down by 0.4% to the dollar at $1.3167 on Thursday.

The dollar also lost about 10% against a basket of currencies between March and the announcement of progress on Pfizer’s coronavirus vaccine on Monday. However, the moves in the past week have put the brakes on a long drop for now.

Brussels will get 300 million doses of Pfizer vaccine

 

Investors held larger moves in check while they await speeches from the Bank of England Governor Andrew Bailey, Federal Reserve Chair Jerome Powell, and European Central Bank President Christine Lagarde at a central banking forum on Thursday.

Before traders turned cautious, the New Zealand dollar made a fresh 20-month high against the U.S. dollar. The Kiwi surged forward to $0.6915. However, it had last tumbled down again, trading 0.16% lower on the day at $0.6870.

RBNZ Assistant Governor Christian Hawkesby noted that less stimulus is required than they thought in August. However, it’s still a substantial amount of stimulus.

ANZ Bank still believes New Zealand rates will drop below zero in August 2021. Still, it stated that it’s now become a bit of a toss-up as it is clear that going negative is no longer urgent.

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