Dollar stabilizes after major events in the US

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According to the US Dollar Currency Index (DXY), the exchange rate of the US dollar (USD), strengthened on Monday evening of 14 December. Analysts believe that the cause of USD exchange rate stabilization was caused by two major events – the launch of vaccinations against Covid-19 in the United States (US) and the decision of the Electoral College that confirmed the newly elected President Joe Biden.

On Monday, 14 December 2020, the Electoral College voted to consolidate the victory of the newly elected President of the US Mr. Biden over the incumbent Donald Trump. The ballots were cast on 14 December by individual voters from all 50 states, as well as from the District of Columbia (Washington, DC), reflecting the results of the popular vote throughout the United States. The reporters said that shortly before 5:30 p.m. eastern time in the United States, California voters cast 55 votes for Biden, pushing him above a decisive 270 electoral vote. Subsequently, at approximately 19:15 ET representatives of the state of Hawaii cast the last 4 electoral votes of the day, which expressed support for Biden, who won a total of 306 election votes, compared to Trump, who won 232 votes.

Along with this event, a comprehensive vaccination of the population against Covid-19 was launched in the USA, when among the first to receive this vaccine produced by the joint American-European consortium Pfazer-Biontech, were first-line workers, primarily paramedics and police officers. Subsequently, a nationwide vaccination plan is developed, which should gradually ensure the possibility of vaccination of all 320 million Americans. On 11 December the Food and Drug Administration (FDA) or the United States Food and Drug Administration federal agency issued the first emergency use authorization for people 16 years of age and over. Due to the persistence of still relatively significant side effects of this vaccine, the FDA has not approved its use for children. According to the FDA’s government website, the most common side effects of this vaccine are: persistent injection site pain, fatigue, headaches, muscle aches, chills, joint pain and fever. However, clinical trials of this vaccine have shown its effectiveness up to 95 percent, and according to analysts vaccinating is a way to prevent the spread of the virus and, at the same time, it prevents economic destabilization of the world.

Based on these facts and the development of the main domestic events in the US, investor sentiment strengthened positively for the USD. According to the US Dollar Currency Index (DXY), which compares the USD with a basket of six other major world currencies, the USD has already risen slightly due to these events. On 15 December at 6:32 am CET, the USD was seen at the price level of 90.71, with the current strengthening by +0.01%. However, according to foreign exchange strategists, a slight volatility of the USD exchange value can still be expected and the point value according to the DXY index is likely to show an increasing change in the business trend in the form of temporary strengthening and decline close to zero exchange rate difference. The USD is still losing to the Euro (EUR) when on 15 December at 6:42 am CET, the currency pair traded at US$ 1.215 per EUR, with the USD down -0.04% against EUR.

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