Risk appetite remains buoyant amid the news about the development of coronavirus vaccines. Moderna announced that it had applied for emergency approval to use its COVID-19 vaccine in the United States. Moderna is likely to become the second vaccine to receive US emergency use authorization this year. The US dollar as a safe-haven asset is trading with losses. Last night, it experienced a slight rebound as many investors closed their short deals at the end of the month. Overall, November turned out to be the worst month for the US currency since July. The US dollar index, which measures the strength of the greenback against a basket of six major currencies, is stuck below the level of 92.00.
What is more, the US currency remains weak due to the lack of additional stimulus measures to support the economic recovery in the short term. The Fed’s comments also raised concerns among investors. Federal Reserve Chairman J erome Powell underscored the importance of lending programs it had deployed during the coronavirus pandemic. He added that they are integral in keeping the economic fallout from being worse. Apart from lending and liquidity programs, the regulator is expected to pump more money into the economy expanding its bond-buying program and offering super-cheap loans to banks. The stock market has turned bullish amid such news. Usually, the overall sentiment in the equity market greatly affects the movements of the dollar/yen pair. However, the US stock indexes are now trading sideways while the Asian ones are climbing up. The dollar/yen pair is currently heading for the level of 104.40. Technical analysis experts are sure that the pair is going to fluctuate in the range between 104.05 and 104.77. So, it is most likely to close today’s session trading sideways.
If it consolidates below the 104.05 level, bears are sure to take the upper hand. In such a scenario, the pair may well drop to 103.18. Traders welcomed an encouraging economic report from China as well. The IHS Markit team along with Caixin Insight Group confirmed a revival of business activity in the manufacturing sector among medium and small enterprises in China. The manufacturing PMI in November jumped to 54.9, logging the highest value in the last 10 years.
However, the Australian dollar, which reacts to any news regarding China’s manufacturing sector, is trading sideways, near a 3-month high. At today’s meeting, the Reserve Bank of Australia decided not to change its stance on monetary policy. Technical signals are now affecting the trajectory of the pair. It has fallen below the technical level of 0.7380, which indicates a possible decline to the target level of 0.7252.