FOREX-Safe-haven dollar hits one-month low on vaccine hopes

(New throughout; changes dateline, previous LONDON)
By Kate Duguid
July 15 - Risk sentiment revived in currency markets on
Wednesday as progress toward a COVID-19 vaccine helped equities
rebound and commodity currencies strengthen, pushing the dollar
to a one-month low.
The dollar index =USD fell below 96 for the first time
since June, dropping to a one-month low of 95.770. It was last
trading down 0.20% at 95.960.
The U.S. company Moderna MRNA.O has produced an
experimental COVID-19 vaccine that provoked immune responses in
all 45 volunteers, sparking a risk-on mood. But there was still some cause for caution, with worsening
U.S.-China tensions and fears about the economic impact of a
second wave of coronavirus in the United States. Florida, which has become an epicenter of the new outbreak,
reported 133 new COVID-19 fatalities on Tuesday, and raised its
death toll to more than 4,500. Among the riskier commodity-linked currencies, the Canadian
dollar CAD= was 0.62% stronger; the Australian dollar AUD=
was up 0.60% and the New Zealand dollar NZD= was up 0.52%.
"The main driver here is from the U.S. dollar side," said
Commerzbank's head of foreign exchange and commodity research,
Ulrich Leuchtmann.
The euro EUR= extended overnight gains to a four-month
high of $1.145 versus the dollar, close to the euro-dollar's
peak of $1.150 in early March. It was last up 0.18% at $1.142.
The single currency was boosted by a combination of dollar
weakness and hopes that European Union leaders will reach an
agreement about a proposed coronavirus recovery fund at the EU
summit on Friday and Saturday.
"The pair has been floated by a combo of broader dollar
softness, which has come amid a risk-on backdrop, and by the
recent broad underpinning the euro has seen amid expectations
for EU leaders to green-light the proposed 750 billion euro
recovery fund this week," wrote analysts at Action Economics.
German Chancellor Angela Merkel said in a news conference
with Spanish Prime Minister Pedro Sanchez on Tuesday that
Germany would push for a compromise. France believes it is
possible to reach agreement on the recovery plan and budget, the
office of the French presidency said on Wednesday.