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Dollar little moved by optimistic news on another COVID vaccine

The dollar was little changed on Monday after pharmaceutical firm Moderna MRNA.O became the second U.S. company in a week to report positive results from its COVID-19 vaccine trials.

Optimism about the vaccine lifted stocks but mostly bypassed the foreign exchange markets, where currency trading held the index of the U.S. dollar against a basket of currencies =USD at 92.64, just below its late Friday level at 92.74.

Moderna MRNA.O said its experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage trial. That followed a similar vaccine-related update from Pfizer Inc PFE.N a week earlier.

The risk-on mood lifted U.S. stock indexes on Monday and nudged up the yield on the 10-year U.S. Treasury note US10YT=RR.

Despite fears of a resurgence of global cases of COVID-19, investors remain hopeful that a working vaccine could rescue the global economy, helping to fuel a rally in stock markets and a rebound in riskier currencies.

The euro EUR= was steady as investors began the week in a relatively upbeat mood after strong economic data from Asia. The euro hit a one-week high of $1.187 EUR=EBS earlier in the day and was last up 0.07% at$1.184.

Commerzbank analysts said investor confidence that the euro region was better prepared to launch more fiscal stimulus than a divided U.S. Congress was also helping.

Data on Monday showed signs of economic recovery in China and Japan, the world’s second and third largest economies. In other promising news for the region, 15 Asia-Pacific countries on Sunday signed the China-backed Regional Comprehensive Economic Partnership deal, a China-backed deal that excludes the United States, which had left a rival Asia-Pacific grouping under President Donald Trump.

The dollar against the Chinese yuan was last off 0.23% CNH=EBS in offshore markets at 6.576, after the Chinese currency earlier in the day hit a one-week high of 6.566 yuan per dollar.

Treasury yields rise slightly following more positive vaccine news

U.S. Treasury yields rose slightly on Monday as more positive news on the Covid-19 vaccine front sent investors out of the safety of government bonds.

The yield on the benchmark 10-year Treasury note rose 1 basis points to 0.901%, while the yield on the 30-year Treasury bond also traded slightly higher at 1.654%. Yields move inversely to prices.

Reference: Reuters, CNBC