The US dollar began to weaken steadily against major currencies on Monday, December 14, but at a much slower rate. At close of the trade, the dollar index DXY dropped by 0.3% to 90.70 points. The exchange rate of EUR/USD was up 0.3% to $1.2148, near to its highest level since April 2018.
Early approval by the FDA of the Pfizer and BioNTech vaccines for the launch of large-scale vaccination in the United States has been the key event in recent days. Note that this vaccine was approved earlier in the United Kingdom and Canada. Against this backdrop, there was hope for future relief from the West’s coronavirus crisis, and as the US and UK initiated vaccination campaigns, excitement about the vaccine increased. The Singapore Health Authority also approved Pfizer and BioNTech drug vaccinations on Monday, and the first deliveries of the vaccine to the country will be carried out by the end of December. The rising number of COVID-19 infections worldwide has tempered optimism, however. The mayor of New York City is planning for a second complete shutdown of the city, while other regions of the country are also considering restrictions being tightened.
European governments are also tightening up on efforts to contain diseases. At the same time, the most stringent steps in the UK could be implemented in London, beginning on Wednesday, as new wave of the virus has been identified in the city. The latest lockdown will in turn, be implemented in Germany on December 16 and will last until the end of the Christmas holidays.
It has become clear in the US that the $908 billion stimulus package will be split into two parts. This gave hope that in the near future at least much of it, which is already endorsed by both parties, will be accepted. The risk appetite continued to rise against the backdrop of the above-mentioned news, playing against the US dollar, albeit restricted by an increase in the Covid-19 cases worldwide and new lockdowns in the West.