(Bloomberg) — A stake about the U.S. dollar falling at the medium term creates the vital premise that a vaccine from the publication coronavirus will probably be available relatively shortly, based on Bank of America Corp.
That’s because Europe and Asia have a greater prospect of waves of infections that the longer it takes to get a vaccine to be discovered, a situation that’s bullish for the dollar, stated David Woo, a strategist in the bank.
Woo in an Aug. 3 notice endorsed short-term dollar transports, but stated many investors don’t recognize the largest perspective inherent a medium-term dollar brief is a vaccine will “become available sooner rather than later.”
An extended route into an inoculation would increase the chances “that liquidity support from central banks will not be enough to shore up financial markets,” he explained. That may spur risk aversion and advantage the buck granted its status as a safe haven.
The pathogen has recently flared up in certain U.S. nations, threatening to hamper the nation’s financial recovery and contributing to the greenback’s worst fall last month in roughly a decade. Lots of different factors are mentioned for dollar weakness, for example negative real returns on several U.S. bonds along with the increase to the euro from a European Union joint economic-stimulus bundle.
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