Reasons for the US dollar weakness

Markets are rallying amid several upbeat developments, and this has resulted in a sell-off of the safe-haven US dollar, Yohay Elam, an analyst at FXStreet, reports.

Key quotes

“Massachusetts-based Moderna announced that its initial vaccine trial has shown that subjects have developed antibodies for COVID-19. While the experiment is of limited scale the encouraging results have sent stocks rallying. The next phase is due in July.”

“Markets are encouraged by the message due out by Jerome Powell, Chairman of the Fed. In his prepared remarks, Powell pledged to keep rates low until the US returns to full employment and his tone was more optimistic than in an interview over the weekend.” 

“Germany and France agreed to boost EU fiscal support by €500 billion, coming from new debt raised by the European Commission and distributed as grants. The accord still awaits approval yet the news also contributed to a better mood and pushed the greenback lower.”