- Moderna vaccine trials encouraged investment in riskier assets.
- S dollar slips as vaccine news fuels risker investments.
- Euro remains strong on a plan to use a recovery fund to support hard-hit regions.
The EUR/USD exchange rate was off to a bullish start on Tuesday as the U.S dollar slipped, paving the way for the Euro’s gains. This performance comes on the heels of positive coronavirus vaccine clinical trial data from pharmaceutical giant Moderna (MRNA.O). Investors took this positive news, and so they started investing in riskier currencies.
The EUR/USD exchange rate remained weak bullish for the better part of Tuesday morning. The price of the cryptocurrency is expected to experience significant resistance at the $1.0918, $1.0972, $1.1011, and $1.1091 price levels if it trades long above $1.0898. The dollar’s weakness on Tuesday morning also allowed the Pound Sterling to enjoy significant gains, and that translated to a notable rally for the GBP/USD. The Pound rallied from its 8-week lows against the U.S dollars amid the ongoing Brexit concerns, and especially with the lack of a clearly defined direction on Brexit talks.
Germany and France proposed the use of a 500 billion euro fund to provide support to regions that have been affected the most by the coronavirus. This provided some upside for the Euro, allowing it to gain against the dollar and the Swiss Franc. Spain and Italy are among the European countries that are expected to benefit the most from the proposed fund. However, investors are keenly observing how the Euro will perform after the release of the ZEW survey on German investor sentiment on Tuesday.
The rallying crude oil prices also provided support to the riskier currencies, thus allowing them to gain, especially as the prospects of economic recovery improve. Meanwhile, Jerome Powell of the Federal Reserve revealed that they are willing to roll out more economic stimulus measures to combat COVID-19’s negative economic impact.