Chinese yuan reached its highest against the dollar

On Tuesday, the euro increased against the U.S. dollar, supported by optimism over another covid-19 vaccine. Additionally, the Chinese yuan reached its highest against the greenback since June 2018.

Furthermore, Europe’s shared currency declined against a broadly stronger pound, which boosted on media reports that the United Kingdom could reach a post-Brexit trade agreement with the European Union by early next week.

Besides, as we know, Moderna Inc, a biotech company, became the second U.S. pharmaceutical company in a week as it reported positive results from trials of coronavirus vaccine. According to Moderna, its vaccine is 94.5% effective.

Except for that, encouraging progress in vaccine testing supports the U.S. dollar increase versus the yen and Switzerland franc last week. However, on Tuesday, the yen gained background against the greenback.

According to global head markets of ING, Chris Turnes, the euro/dollar stays well-supported, buoyed by global optimism. He added that  Given the challenges Europe views, the euro won’t lead the rally versus the greenback as the second lockdown has started. Chris Turnes announced that he thinks the greenback fall is broad enough to drag the euro/dollar back to $1.1920.

Sterling gained 0.5%, while the euro boosted 0.2% to the dollar

Additionally, the euro traded 0.2% up to the greenback at $1.18770. The British pound increased by 0.5% and settled at $1.3266. Sterling also gained 0.3% to 89.51 pence per euro.

The U.S. dollar declined by 0.3% to trade at 104.20 yen.

Furthermore, investors in the U.S. dollar were looking ahead to the announcement of U.S. retail sales and industrial production later on October 17 to measure the economic rebound’s health.

Nevertheless, policymakers’ response to a record number of Covid-19 infections, hospitalizations, and deaths in several United States states is expected to remain of more significant concern.

Moreover, the dollar index versus a basket of major currencies was at 92.431, which is its lowest in more than a week.

The Covid-19 cases are also boosting in the United Kingdom, Europe, and Japan, further clouding the economic outlook.

The Australian dollar held on to overnight gains versus the U.S. dollar. In contrast, the New Zealand dollar declined after reaching its highest in more than a year as investors reduced bets for additional interest rate cuts.

The Reserve Bank of Australia’s last policy meeting confirmed that the central bank provided more policy stimulus if required after lowering rates to record lows.

Additionally, the onshore yuan reached its peak since June 2018 versus the greenback at 6.5457 as positive economic data resumed to help the Chinese currency.