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Positive Covid-19 Vaccine News Boosts Australian and New Zealand Dollar

Published: 9 Nov at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, France, Germany, Ireland,

Pound (GBP)

The Pound (GBP) rose today on renewed hopes of a post-Brexit trade deal following the weekend’s tumultuous uncertainty over US political elections.

Following Democrat Joe Biden’s substantial lead on US President Donald Trump, GBP investors are now more hopeful that this could place extra pressure on UK-EU trade talks, resulting in a trade agreement.

Ireland’s Minister of Foreign Affairs, Simon Coveney, said:

‘I think this will be a cause for ’pause for thought’ in No 10 to ensure that the Irish issues are prioritised as we try to close out this phase of the Brexit negotiations.’

Nonetheless, the UK economic outlook remains bleak, with analysts warning of a possible pre-Christmas slump.

Euro (EUR)

The Euro (EUR) has suffered from a sell-off in favour of riskier assets today following news from biotech companies that their Covid-19 vaccines are 90% effective.

Consequently, demand for the single currency has slipped owing to increased demand for riskier assets like the Australian Dollar.

In Eurozone economic news, Germany’s exports have performed relatively well in recent months.

However, with France and Germany presently under Covid-19 lockdowns, EUR traders have remained cautious.

US Dollar (USD)

The US Dollar (USD) has also struggled from risk-on markets today as the US elections appear effectively settled, with Joe Biden the President-elect.

Furthermore, with news of an effective Covid-19 vaccine, the safe-haven ‘Greenback’ has suffered a sell-off in favour of risky-assets.

Danielle Antonucci, an economist at Quintet Private Bank, commented:

‘The markets were already expecting a Biden victory at the end of last week, but confirmation over the weekend is leading to a positive reaction in US markets this morning, as investors respond to diminishing uncertainty and prospects of fiscal stimulus without the threats of tax hikes and extra sector regulation.’

Canadian Dollar (CAD)

The Canadian Dollar (CAD) has remained generally subdued following last week’s disappointing Canadian unemployment report, which disappointed.

Oil prices have also remained volatile, weighing on demand for the commodity correlated ‘Loonie’.

Australian Dollar (AUD)

The Australian Dollar (AUD) has benefited from news of a possible Covid-19 vaccine today, with the ‘Aussie’ reaping the benefits for being a risk-asset as investors flock from safe-havens.

Nevertheless, US political uncertainties still remain, with Donald Trump failing to acknowledge Joe Biden’s victory over the weekend.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) also edged higher today following the announcement from biotech giants Pfizer and BioNTech that their coronavirus vaccine is 90% effective.

Consequently, this saw the risk-averse ‘Kiwi’ edge higher against many of its peers today.

As of Monday, 9th November 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1136, GBP USD exchange rate was 1.3167, GBP AUD exchange rate was 1.8093, GBP NZD exchange rate was 1.93, and GBP CAD exchange rate was 1.7128.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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