Not wanting to be outbid, Pfizer-BioNTech vaccine partners returned to the numbers to check the efficacy of their vaccine. Their headline of 90% published only last week was bettered by Moderna’s vaccine. Not only could Moderna’s vaccine be stored and transported more easily despite relying on similar fundamentals, but they claimed a near 95% success rate. Not wanting to lose the limelight, a brief revamp of the figures at Pfizer and the statisticians managed to find the missing 5%. The claim whilst looking like corporate playground jostling puts the Pfizer-BioNTech vaccine back on top. Aside from being amusing to watch two multi-billion Dollar companies squabble over a handful of percentage points, the vaccine breakthroughs have shifted major market participants’ forecasts for the Dollar.
As we have said many times, due to the Dollar‘s safehaven status the resolution of a global upset, such as the pandemic, should cause an unwinding of defensive demand that has accrued behind the US Dollar. The success of these two vaccines is considerable fundamentally because the trials prove that the virus that causes Covid-19 can be warded off by vaccination. Before testing, we didn’t know if this was possible or if, as with many ailments in life, it cannot be vaccinated against. Therefore corporate squabbling of ‘my vaccine is better than your vaccine’ only develops the fact that in most of the population we have a weapon to fight Covid-19 beyond therapeutics.
The consensus forecast among analysts for 2021’s EURUSD pair is 1.21. But partially that reflects a relatively strong performance by the Euro as we emerge from the pandemic. The Dollar across the board is expected to weaken much faster with emerging market and commodity currencies in particular expected to claw back ground on the greenback. In a recent research note, Citi Bank analysts commented that the Dollar could fall as much as 20% next year alone. The perfect Dollar storm of a Covid vaccine, Republican President Biden at the helm and a Federal Reserve stuck in grab the bucket mode could facilitate this outcome.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – POTUS in Kingdom of Saudi Arabia
Humphrey Percy
Wed 14 May 2025
POTUS in Kingdom of Saudi Arabia As one of POTUS’ travelling companions on this week’s visit, Larry Fink of Blackrock represents everything that a US President might want to burnish his credentials in the desert kingdom: head of the largest asset manager on the planet, hugely influential and totally credible. Just a shame that he […]
Daily Brief – Oil Price
Humphrey Percy
Fri 2 May 2025
Oil Price Pre TT or Trump Tariffs, the oil price seesawed around but mostly reverted to its mean over a few trading sessions unless a major piece of economic, political or trade news arose. All that has gone out of the window with steady declines in session after session, so in case you have been […]
Daily Brief – Beyond USD
Humphrey Percy
Mon 12 May 2025
Beyond USD A comment caught our eye over the weekend: assuming that US markets will recover is not a strategy, it is now for the first time in decades a gamble. With the Vix volatility index of the S&P500 still high, US Treasuries having failed the test recently when they failed to rally at market […]
