Dollar up over dimming vaccine hopes and simmering US-China tensions

WASHINGTON: The dollar was up on Thursday morning in Asia, reversing earlier losses as investors turn towards the safe-haven asset.
Wednesday’s hopes for a COVID-19 vaccine dimmed, with doubts surfacing over the efficacy of Moderna (NASDAQ:MRNA)’s potential COVID-19 vaccine in immunizing against the disease. Moderna said on Tuesday that all 45 volunteers participating in a study for the vaccine developed high levels of virus-killing antibodies.
ANZ analysts still remained optimistic, saying in a note, “Results like this are encouraging… without a vaccine, devastating health impacts will continue, with significant economic implications. The stakes couldn’t be higher.”
But COVID-19 continues its rampage globally, with over 13.5 million cases and almost 600,000 death as of July 16, according to Johns Hopkins University data.
Meanwhile, U.S. President Donald Trump privately ruled out further sanctions against Chinese entities involved in enacting Hong Kong’s national security laws on Wednesday, attempting to diffuse escalating U.S.-China tensions.
But tensions remain in place, with China threatening to retaliate after Trump also stripped Hong Kong of its special trading privileges and signed an executive order for initial sanctions on Tuesday.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.01% to 96.032 by 10:12 PM ET (3:12 AM GMT).
The USD/JPY pair gained 0.01% to 106.94.
The USD/CNY pair gained 0.05% to 6.9923. China reported a 3.2% growth in its second-quarter GDP year-on-year, with the country dodging a recession amid COVID-19’s economic impact. Data on June factory output, retail sales and fixed-asset investment was also released earlier in the day.
The AUD/USD pair lost 0.23% to 0.6991. Australia’s economy is heading into a recession as the number of cases climb and some parts of the country re-impose lockdowns. The NZD/USD pair fell 0.20% to 0.6557.
The GBP/USD pair was down 0.08% to 1.2569. Tensions between the U.K. and China are also rising over the U.K. directive to purge Huawei equipment from the country’s telecommunication network by 2027.