The EUR/USD currency pair reported a small rise of 0.43 percent to 1.1890, at close of the trading on Tuesday. The DXY dollar index is declining by 0.38% and is at 92.15 levels. The exchange rate of the single European currency against U.S. has hovered around the level of 1.1850 for the second week. However, thanks to investors’ increasing risk appetite, riskier currencies are doing much better.
It has recently become clear that tests for another COVID-19 vaccine have been completed in recent weeks. In the UK and Brazil, AstraZeneca has announced the successful completion of large-scale clinical trials. This would be the cheapest and most conveniently transported vaccine, according to the company’s representatives. For up to six months, vaccine can be stored in a normal refrigerator. Preparations are under way to supply data for conditional or early approval of the drug to authorities around the world. The vaccine race continues, and even the news of a potential coronavirus vaccine is heating up markets, especially in developing countries whose currencies represent risky assets.
In addition, the announcement by the Trump team of the beginning of the transition of power to the Democrats was one of the factors that weakened the dollar as it lowered political uncertainty, fueling the risk appetite in the markets. However, incumbent Donald Trump also refuses to accept Joe Biden’s win and plans to appeal the results of the electoral vote.
The weakening of the U.S. dollar was also affected by the potential appointment of the former Fed head Janet Yellen as the new U.S. Treasury Secretary to president-elect Joe Biden. Financial markets in the U.S. hailed the decision of her appointment and in turn, she called for increased government spending to boost the economic recovery that has been destroyed by the coronavirus impact. Yellen Also noted that increasing economic disparity poses a challenge to the future of the country.