• USD rises strongly on yields and economic optimism
• 10-year yields edged higher, closing at a fresh 12-month high
• Pfizer/BioNTech COVID vaccine succeeded in neutralizing Brazilian variant in lab
USD rises aggressively against its counterparts on Tuesday amid surging bond yields and expectations of faster economic recovery from the pandemic. The dollar index currently trades at 92.34 and was once at 92.469 – the highest since last November. USDJPY also reached 109.19 – the highest in nine months. On the other hand, EURUSD slipped to its lowest since November but has since then pulled back a little bit, trading at 1.1859 at press time. These movements have been backed by the optimism from vaccine rollouts, as the US CDC announced that fully vaccinated people could meet without masks in certain occasions. This follows the data that about 30 million people – 9.2% of the total US population – have ben vaccinated. Given these situations, the Fed will release its fresh projections when it concludes the policy meeting on March 17th.
The 10-year Treasury bill is still on the rise, climbing by 2.13% to a fresh 12-month high of 1.599%. Investors are alerted by the possibility that the yields would rise further as the auction on 3-, 10- and 30- year bills are upcoming, worth a total of $120 billion. Moreover, the Fed has been reluctant to address the longer-term borrowing costs, and this may exert further downward pressure on the equity market and precious metals at least for now. Gold prices extended the losses and refreshed its 9-month low to $1,683, currently trading at $1,688.61 at press time.
Recently around the globe, there have been three major types of COVID variants – the one emerged in the UK, in South Africa, and in Brazil. Most investors are concerned that current vaccines will lose its effects against the new strains, but recent findings released today from a study conducted by the University of Texas Medical Branch have something positive to share. According to the study, the vaccine jointly developed by Pfizer and BioNTech has neutralizing ability against the Brazilian variant, and the effect is “roughly equivalent” to that on the original version. Previously, Pfizer stated that its vaccines were highly protective to the South African variant.