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Dollar Stays Weak As Riskier Assets Rise On Vaccine Hopes

The U.S. dollar slid against major currencies on Monday as optimism about coronavirus vaccines prompted traders to look for riskier assets such as equities.

Markets were also looking ahead to the upcoming monetary policy meeting of the Federal Reserve. The Bank of England and the Bank of Japan are also scheduled to announce their monetary policies this week.

Oxford University and AstraZeneca announced on Saturday the resumption of trials of the coronavirus vaccine after the U.K.'s Medicines Health Regulatory Authority allowed the resumption of phase III clinical trials.

AstraZeneca announced that it is working with other health authorities as to when they can resume the other studies on AZD1222.

AstraZeneca had halted trials of the vaccine early last week due to safety concerns following a U.K. patient's unexplained illness,

Reports that Pfizer will be ready with its coronavirus vaccine in the U.S. before the end of the year contributed as well to the positive mood in stock markets.

The dollar index, which dropped to 92.87, recovered to 93.07 by late afternoon, but was still trailing its previous close by almost 0.3%.

The Euro was stronger, fetching $1.1863. Earlier in the session, the Euro had firmed up to $1.1889. Data from Eurostat showed Eurozone industrial production grew at a slightly faster than expected pace in July, rising 4.1% from June, when it grew by an upwardly revised 9.5%. Production gained for a third straight month.

Against Pound Sterling, the dollar was down more than 0.4% despite having recovered to $1.2851 from a low of $1.2919. The pound appreciated against its major rivals ahead of the debate on the Internal Market Bill.

The legislation violates the withdrawal agreement signed in January, souring relations between London and Brussels. It will override the Northern Ireland protocol, which requires the island of Ireland to follow EU rules in the event of a no deal Brexit.

Several members of the Conservative Party said that they will vote against the bill or abstain to block it from proceeding through Parliament.

The yen firmed up to 105.55 before retreating a bit. Still, at 105.70 a dollar, the currency was up more than 0.4% from previous close.

The Aussie firmed up to US$0.7288, gaining marginally. The dollar, which was trading at 0.7265 a unit of the Australian currency in the Asian session, weakened to 0.7304 before regaining some lost ground.

The Swiss franc was up marginally at 0.9084 after moving between 0.09058 and 0.9099 a dollar.

The Canadian currency Loonie was little changed at C$1.3180. It moved in a tight range between 1.3153 and 1.3197 a dollar today.

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