- AUD/USD is rising sharply ahead of the American session.
- S&P 500 futures are up more than 3% ahead of the opening bell.
- Pfizer says its coronavirus vaccine is 90% effective.
The AUD/USD pair rose sharply as risk flows started to dominate financial markets after Pfizer announced that its experimental coronavirus vaccine is “more than 90% effective.” As of writing, the pair, which touched its highest level since early September at 0.7330 earlier in the hour, was trading at 0.7318, gaining 0.8% on a daily basis.
Coronavirus vaccine optimism lifts the market mood
Commenting on the market reaction to Pfizer’s announcement, “the COVID-19 vaccine news adds to the positive risk tone in stocks and underpins high beta currencies vs the US dollar,” Kenneth Broux, FX strategist at Societe Generale, told Reuters. “Any positive news on a vaccine is good news for the world economy and offers a perspective for rebound/normalisation in 2021 growth.”
Reflecting the positive shift in market sentiment, the S&P 500 futures hit a new record high and was last seen gaining 3.7% on the day at 3,630. Additionally, Germany’s DAX 30 and the UK’s FTSE 100 indexes are up 5.5% and 5%, respectively.
On the other hand, the US Dollar Index is staying relatively quiet near 92.30. However, a rally in US stocks in the second half of the day could put the greenback under renewed bearish pressure.
There won’t be any macroeconomic data releases featured in the US economic docket in the remainder of the day. In the early trading hours of the Asian session on Tuesday, the National Australia Bank’s Business Confidence Index will be looked upon for fresh catalysts.
Technical levels to watch for
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