Dollar’s Movement is Heavily Reliant on Stimulus, Again

The US dollar is following the downward trajectory as the market’s focus shifts on the developments of the stimulus package again.

The USD index tracks the performance of the greenback against other entities in the basket of currencies. This week it edged down by 0.07% to 90.343. 

The world’s reserve currency plays at its support level, which has been its lowest settlement in the last two and a half years.

Risk sentiment is yet again dominant. It is ignited by the fresh monetary cushion and supported by the successful approval of the Pfizer-BionNTech Covid-19 inoculation.

The United States already administrated its first shot earlier on Tuesday, starting with its front-line health workers and the elderly in nursing homes. 

The government targets to vaccinate thousands of citizens under vulnerable conditions in the coming weeks.

Adding to the optimistic mood is Moderna’s mRNA-1273, which is likely to receive regulatory approval within the week.

With the recent developments, the USD JPY pair fell below the 104-point threshold after slashing 0.21%. It currently trades at 103.44 against its American counterpart.

Japan recorded a sluggish export performance for November. It was undermined by the low volume of orders from its key trading partners China and the United States.

The Bank of Japan announced its plan to purchase $6 billion worth of dollar cash from the Ministry of Finance. This is as a part of an initiative to secure its foreign currency reserves.

Across the Pacific, the risk-sensitive Aussie continues to record hikes for the week after taking home an impressive gain from last week’s session.

How are Antipodeans Faring?

The AUD/USD pair adds 0.03% to 0.7560, nearing its highest settlement in the last two and a half years, which comes as of last Monday.

The country is officially out of recession and this development is likely to add further strength to its currency. 

The only remaining concern that could impact the Aussie significantly is its ongoing trade riffraff with China on key exports, including coal, barley, seafood products, among others.

Consequently, its neighbor is following the upward trend after adding 0.25% for the day. The NZ Dollars to US Dollars are currently at 0.7105. 

It managed to clinch to 0.7120 on Monday, which is its highest in more than two years.

Elsewhere, the pound edged up by 0.1% to 1.3462. This is due to the optimistic hopes for the post-Brexit trade deal between the United Kingdom and the European Union.

The GBP continues to benefit from the decision of the parties to give a final try to seal an agreement, but the result remains undetermined.