The American dollar regained its bullish momentum on Wednesday, amid doubts over a potential vaccine for the Covid-19 virus.
At about 4.20 am, Nigerian local time, the U.S dollar index, which tracks the American dollar against a basket of major currencies like Euro, Canadian dollar, Swedish Krona, Swiss Franc, British pound, and Japanese Yen, stood at 99.368, up 0.24%.
Late Tuesday, a statement from medical news website STAT cast uncertainty over encouraging early results from a Moderna COVID-19 vaccine trial, saying that the American drug maker had not supplied enough data to determine the vaccine’s effectiveness.
Global Investors turned to the U.S dollar as their haven asset after the report cut their hopes for a potential cure for the COVID-19 virus.
What it means: Nigerians hoping to meet foreign exchange payment obligations, transactions via the dollar to countries like Europe, and Japan, will have the need to pay fewer dollars to fulfill such transactions.
Also, in recent weeks the world’s most powerful man, Donald Trump, boosted the U.S dollar rally when he said, “It’s a wonderful time to have a strong dollar … Everybody wants to be in the dollar because we kept it strong. I kept it strong,” in an interview with Fox Business News.
This comment is in contrast with his earlier stance in which he railed against the dollar’s strength, saying that a strong U.S dollar made U.S. exports expensive abroad and hurt American corporations that needed to convert their foreign earnings into dollars.