Asian session review: the dollar rose against the euro, fell against the yen

During today's Asian trading, the US dollar rose against the euro, but declined against the yen.

Traders are assessing the likelihood of a new stimulus package in the US, given the news earlier this week about the success of trials of the COVID-19 vaccine developed by Pfizer and BioNTech.

Traders are still waiting for the official results of the US presidential election on November 3, which also determines the fate of new incentives.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.05%.

The introduction of the COVID-19 vaccine means less stimulus, says John Hardy, who is responsible for foreign exchange strategy at Saxo Bank.

Analysts also note that Central banks will not have to inject as much liquidity into the financial system as they currently do if the vaccine becomes available soon.

Meanwhile, higher yields on US government bonds compared to European bonds are driving euro sales.

The focus also turned to UK data, which showed that monthly gross domestic product (GDP) grew by 1.1% in September 2020 as lockdown measures continued to ease. This is the fifth consecutive monthly increase following a record fall of 19.5% in April 2020. Economists had expected a 1.5% increase.

September 2020 GDP is now 22.9% higher than its April 2020 low. However, it remains 8.2% below the levels seen in February 2020, before the full impact of the coronavirus (COVID-19) pandemic. There has also been a loss in momentum through Quarter 3 (July to Sept) 2020. GDP grew by 15.5% in Quarter 3 (July to Sept), following two consecutive quarterly falls but has not recovered to pre-pandemic levels