Market mood was lifted on Wednesday by optimism about a coronavirus vaccine as well as the chance a key EU summit will lead to more stimulus.
U.S. biotech firm Moderna’s experimental Covid-19 vaccine was declared safe and generated “robust” immune responses in all 45 volunteers taking part in the study, according to early-stage human trial results published in the New England Journal of Medicine on Tuesday.
Hopes that the European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic also attributed to the positive mood.
On the other hand, Japan’s capital Tokyo raised its warning level to the highest level, and three U.S. states reported new record daily deaths from the pandemic.
The dollar was down on Wednesday morning, with investors continuing the previous session’s retreat from the safe-haven asset. EUR/USD is trading around 1.14 as investors were encouraged by Moderna’s progress toward a coronavirus vaccine. GBP/USD maintained its bid tone near session tops, around the 1.2590 region and moved little post-UK inflation figures. USD/JPY was up 0.01% to 107.21 unfazed by BOJ’s decision to keep key monetary policy tools unchanged.
Oil prices pushed higher on Wednesday, helped by a sharp fall in U.S. crude inventories of 8.3 million barrels in the week to July 10, according to data from API. Official numbers from the Energy Information Administration are due later alongside OPEC+’s decision on production cut that will set the tone for the oil market. U.S. crude futures traded 0.5% higher at $40.48 a barrel, while the international benchmark Brent contract rose 0.3% to $43.03.
Gold was marginally down on Wednesday, reversing some its earlier gains. But the yellow metal’s losses were capped by mounting COVID-19 fears on top of worsening U.S.-China relations, helping gold to stay above the $1,800 mark.
In the absence of any relevant market-moving releases from the Eurozone the focus shifts later during the early North American session to the release of Empire State Manufacturing Index and Industrial Production.