Dollar Slides On Covid-19 Vaccine Hopes

The U.S. dollar declined against its major counterparts in the European session on Monday, as encouraging news on the vaccine front spurred hopes of a faster economic recovery from the virus crisis.

After a string of encouraging vaccine results in recent weeks, the Oxford University and British pharmaceutical giant AstraZeneca announced that their vaccine for the novel coronavirus could be around 90 percent effective under one dosing regimen.

One dosing regimen (n=2,741) showed vaccine efficacy of 90 percent when AZD1222 was given as a half dose, followed by a full dose at least one month apart, and another dosing regimen (n=8,895) showed 62 percent efficacy when given as two full doses at least one month apart.

The combined analysis from both dosing regimens (n=11,636) resulted in an average efficacy of 70 percent, it was said.

The FDA is looking to approve vaccine developed by Pfizer and German partner BioNTech in mid-December. The vaccine has shown almost 95 percent efficacy in preventing coronavirus.

The greenback slipped to 2-week lows of 1.1906 against the euro and 0.9077 against the franc, after rising to 1.1851 and 0.9113, respectively in early deals. The greenback is seen challenging support around 1.24 against the euro and 0.88 against the franc.

The greenback weakened to near a 3-month low of 1.3398 against the pound and a 5-day low of 103.68 against the yen, off its early highs of 1.3272 and 103.87, respectively. Immediate support for the greenback is possibly seen around 1.35 against the pound and 100.00 against the yen.

The U.S. currency depreciated to near a 2-year low of 0.6968 against the kiwi and a 6-day low of 0.7338 versus the aussie, easing from its early highs of 0.6923 and 0.7300, respectively. The greenback is likely to challenge support around 0.72 against the kiwi and 0.75 versus the aussie.

The greenback edged down to 1.3046 against the loonie, from a high of 1.3094 seen in early deals. On the downside, 1.25 is likely seen as its next support level.

Markit's U.S. flash composite PMI for November is scheduled for release shortly.