Dollar Up, But Near One-Week Low as COVID-19 Concerns Ease

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Dollar Up, But Near One-Week Low as COVID-19 Concerns Ease

The dollar was up on Thursday morning in Asia but remained near a one-week low as concerns over COVID-19's impact on the global economic recovery rece

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The dollar was up on Thursday morning in Asia but remained near a one-week low as concerns over COVID-19’s impact on the global economic recovery receded. Investors also await the U.S. Federal Reserve’s Jackson Hole symposium for clues on an asset tapering timeline.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.08% to 92.903 by 11 PM ET (3 AM GMT).

The USD/JPY pair was steady at 110.

The AUD/USD pair edged down 0.13% to 0.7264 and the NZD/USD pair edged down 0.17% to 0.6960.

The USD/CNY pair inched up 0.08% to 6.4809 while the GBP/USD pair inched down 0.03% to 1.3755.

The FDA’s full approval of the Pfizer (NYSE:PFE) Inc/BioNTech SE COVID-19 vaccine earlier in the week, which could boost U.S. vaccination rates, improved investor sentiment. Moderna (NASDAQ:MRNA) Inc could be next to receive full approval, which could happen within weeks.

The Fed’s Jackson Hole symposium will open later in the day, with Fed Chairman Jerome Powell due to speak on Friday. Signals that the Fed will begin asset tapering within 2021 had boosted the U.S. currency to a nine-and-a-half-month high of 93.734 during the previous week, but it remains to be seen whether the central bank

In Asia Pacific, South Korea became the first major Asian economy to hike interest rates since COVID-19 began. The Bank of Korea interest rate for August, handed down earlier in the day, is 0.75%, up by 25 basis points from the previous 0.5% and within expectations.

Some investors remain optimistic about the dollar as Fed asset tapering also moves towards becoming a reality, even if it is delayed by COIVD-19 uncertainties.

“While this would be a dollar negative factor on the one hand, COVID-19 Delta worries may simultaneously increase the safe-haven appeal for the dollar,” Rabobank strategist Jane Foley said in a note.

“On balance, while pullbacks are likely to be par for the course, we see scope for euro/dollar to head towards $1.16 on a six-month view,” the note added. The dollar was $1.1765 against the euro on Thursday, little changed after falling to a one-week low of $1.1775 the day before.

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