Risk Assets Rally Amid Pandemic Recovery OptimismRisk sensitive currencies such as the Australian dollar, New Zealand dollar and Canadian dollar gained ground in early Tuesday trading as hopes grew over global economic recovery from the fallout of the COVID-19 pandemic.
Positive coronavirus vaccine news and indications that global economies are slowly reopening helped to buoy investor mood.
American biotech company Novavax Inc. (NVAX) announced on Monday that it has started the first human trials of its experimental coronavirus vaccine. Results of the clinical trial are anticipated in July 2020.
Novavax CEO Stanley C. Erck stated: “Administering our vaccine in the first participants of this clinical trial is a significant achievement, bringing us one step closer toward addressing the fundamental need for a vaccine in the fight against the global Covid‑19 pandemic”. Last week, biotech Moderna announced that its experimental vaccine appears to be safe and able to stimulate an immune response against COVID-19.
Data from Johns Hopkins University indicates that coronavirus COVID-19 global cases have risen to 5,499,535 with 346,326 fatalities. In the hard hit United States over 98,000 people have lost their lives due to the coronavirus and more than 1.6 million have been infected. Nevertheless, all 50 states are beginning to reopen in some way.
Meanwhile, US/China tensions simmer and continue to dampen risk appetite. White House national security adviser Robert O’Brien warned on Sunday that the United States will likely sanction China if plans for new national security laws in Hong Kong are carried out.
Speaking on NBC’s Meet the Press, O’Brien stated: “It looks like, with this national security law, they’re going to basically take over Hong Kong and if they do … Secretary (of State Mike) Pompeo will likely be unable to certify that Hong Kong maintains a high degree of autonomy and if that happens there will be sanctions that will be imposed on Hong Kong and China.”
Looking at the AUD/USD daily chart we can see that the pair has reached its highest levels since March 9th. Resistance sits overhead at the 200 period simple moving average (SMA), while rising trendline support lies beneath.
For a look at all of today’s economic events, check out our economic calendar.
Dan Blystone, Scandinavian Capital Markets