- Indian Rupee (INR) rises after AstraZeneca reveals vaccine is 70% effective
- The vaccine can be stored at room temperature, key for poorer countries
- US Dollar (USD) rises on safe haven flows
- US manufacturing & services PMI in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is trending southwards on Monday, extending losses from the previous week. The pair slipped -0.6% across last week settling at 74.11. At 13:00 UTC, USD/INR trades -0.1% at 74.04.
Risk appetite jumped on Monday after yet more upbeat vaccine news. AstraZeneca revealed that it covid-19 vaccine candidate, developed together with Oxford University is 70% effective and 90% effective with some doses. Furthermore, the vaccine can be stored at room temperature and is cheaper than the other two viable vaccines meaning that it will not only travel better but will be faster to scale out than Pfizer and Moderna’s vaccine candidates. AstraZeneca says that it will have as many as 200 million doses ready by the end of this year.
The news comes as the number of new daily cases covid cases in India rises by 45,209, taking the total to 9.14 million.
The news has lifted the mood in the market, boosting demand for riskier assets and currencies such as the Indian Rupee, whilst the safe haven US Dollar is trading out of favour.
Indian domestic equities have also received a boost from the vaccine inspired lift to risk appetite, whilst Reliance Industries gained on the back of winning regulatory approval for $3.4 billion deal.
Meanwhile the US Dollar is trending lower on safe haven outflows. Attention will now turn towards US US manufacturing and services PMI data for November. Analysts expect the manufacturing PMI to slip to 53 from 53.4. Meanwhile services are expected to drop to 55.5 from 56.9, as rising covid cases and some tightening of restrictions to stop the spread of the virus start to reflect in the data.
The data comes after last week’s initial jobless claims unexpectedly rose as tighter lockdown impacted the labour force by more than expected. A weak reading could hit demand for the US Dollar further
