NEW YORK (Reuters) – The dollar went down higher against the euro on Wednesday as the threat of extended locks in Europe to counter the release of COVID-19 and worries about the pace of vaccine distribution on the common money.
European countries are struggling to keep out the coronavirus amid concerns that a new variant of the virus could lead to tougher locks and more economic pain.
Investors are also complaining about the slowest pace of vaccine distribution compared to the United States and Britain may be stifling economic recovery in the region.
Germany’s most populous state, North-Rhine Westphalia, said on Wednesday it would delay the opening of vaccine centers until Feb. 8 due to a temporary slowdown in vaccine delivery from Pfizer PFE.N and its German partner Biotech.
“The euro slipped as the risk of longer locks in Europe kept alive the risk of a double-dip,” said Joe Manimbo, senior market analyst at Western Union Business Solutions, in Washington.
The dollar was 0.2% higher against the euro, ahead of Thursday’s European Central Bank meeting, which, following last month’s broad easing of monetary policy, is unlikely to change much. to produce.
Investors ’desire for more risky currencies was strong ahead of Joe Biden’s inauguration as US president at noon (1700 GMT) in Washington.
“The new administration is expected to push an agenda of stronger stimulus of nearly $ 2 trillion in an effort to put the recovery on a better path,” Manimbo said.
U.S. Treasury Secretary Janet Yellen’s nominee urged lawyers at her confirmation hearing to “engage heavily” on incentive spending and said she believes in exchange rates prompted by market, not to comment on the direction of the dollar.
The risk-aware Australian dollar was 0.79% higher on the day, while the New Zealand dollar rose 0.69%.
While the dollar has gone up in the past few weeks due to a rise in U.S. Treasury yields, investors still expect the currency to weaken.
Position data show that investors are above short dollars as they predict normal budget and account deficits will weigh on the green.
For a graphical Dollar position:
A combination of higher risk appetite in global markets and particular optimism for the UK lifted the pound on Wednesday, as it strengthened to its highest level in nearly three years against the dollar.
Reciting with Saqib Iqbal Ahmed; Edited by Mark Heinrich