AUD/USD: Aussie Dollar Advances On Vaccine Optimism – Currency Live

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  • Australian Dollar (AUD) rebounds after Oxford University / AstraZeneca vaccine candidate produces encouraging results
  • RBA minutes in focus
  • US Dollar (USD) gives up gains as mood in the market improves
  • Remains vulnerable to sentiment amid a lack of data

The Australian Dollar US Dollar (AUD/USD) exchange rate is pushing higher at the start of the week. After a sluggish start the pair has lifted off session lows and trades +0.2% at US$0.7007, towards the session high.

The risk sensitive Australian Dollar is advancing following an upbeat report from Oxford University and AstraZeneca in the Phase 3 trials for a coronavirus vaccine. The study showed that that an immune response was seen in 100 % of people who were given the jab. This means that there were strong signs in their blood that they could fight off coronavirus if they were to catch it.

Crucially no-one had any bad side effects. The market is seeing these results as holding promise which has boosted risk sentiment. A vaccine is the surest and quickest way for the global economy to return to pre-coronavirus levels of growth.

As risk appetite improved, investors brought into the Australian Dollar whilst selling out of the safe haven US Dollar.

Looking ahead investors will now focus on the release of the minutes from the Reserve Bank of Australia’s latest monetary policy meeting. The central bank didn’t make any changes to policy. However investors will still be keen to scrutinise the minutes for any further clues on outlook.

The US Dollar started the week on the front foot and has since lost ground as the mood in the market improved. After a lack of dollar moving headlines over the weekend, investors focused on elevated coronavirus statistics and their potential to derail the fragile economic recovery.

Data on Friday showed that consumer confidence unexpectedly fell in the US in July as households once again became wary of their financial position and jobs prospects as part of the US economy started to lockdown again.

Investors fear that economic data could start to deteriorate again if covid-19 statistics don’t improve or a vaccine doesn’t come soon.

There is no high impacting US data until towards the end of the week so the greenback will remain vulnerable to sentiment.

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