By Peter Nurse
The u.s. dollar has been very requested on Friday, the disappointment surrounding the trial of an antiviral drug to combat the Covid-19 with dashed hopes of a breakthrough in speed in the control of the pandemic.
A 11: 50 a.m., the u.s. dollar index, which tracks the greenback against a basket of six other currencies, was $ 100,737, an increase of 0.2%, rising to levels not seen since the beginning of the month of April. GBP/USD declined by 0.2% to 1,2319, while USD/JPY has risen 0.1% to 107,66.
Doubts have been raised about the effectiveness of the remdesivir, the antiviral drug from Gilead (NASDAQ:GILD) Sciences, in the treatment of Covid-19, after the Financial Times reported yesterday that he had failed in his first randomized clinical trial.
Gilead has challenged the report, stating that the study had been “terminated prematurely due to low enrollment,” and therefore that “the results of the study are not conclusive”.
However, this has the result that the dollar was sought as a refuge, because the drug was previously regarded as one of the best prospects to treat the virus.
The euro has also weakened against the greenback, since european leaders have reached an agreement on a few details on the form of plan of post-crisis stimulus – although they have approved a financial plan emergency 500 billion euros previously agreed upon.
The president of the european central Bank, Christine Lagarde, has warned that the european Union’s economy could contract by up to 15% this year because of the pandemic.
At 11: 50 am, EUR/USD is 1,0762, a decrease of 0.1%, after having reached its lowest level in a month earlier this morning to 1,0727.
“The EU does not come to a clear agreement (as could be expected), the EUR/USD has fallen by about one digit in the last few days”, said the analysts of the Danske Bank in a research note. “According to us, this continues to suggest that the lack of coherence of the euro zone builds up to give a negative risk premium on the spot market”.
The rating agency S&P could lower its rating of investment for Italy, hovering just above the status of “junk”, which means that the cost of borrowing for this country heavily indebted and could increase as it tries to recover from having been particularly affected by the epidemic of sars coronavirus.
In emerging markets, USD/RUB is stable before a rate cut widely expected by the central Bank of Russia at its policy meeting later, while the brazilian real remained under pressure after hitting a new historic low against the dollar on Thursday.