Euro Rises and USD Weakens as Biden Reveals Initial Plans

After Pfizer/BioNTech announced their mRNA vaccine as 90% effective, Moderna one-upped them with a 94.5% covid-prevention figure. At the same time, the US post-election period yielded no major social upset. However, the US election result remains a big contributor to the weakening of the dollar against the euro.

Biden Makes Euro Stronger

Although the US election result hasn’t been officially called yet by the Electoral College, the momentum clearly remains in Biden’s favor. As a result, Americans can expect to see more cooperative economic policies, focused on nurturing multilateral alliances instead of Trump’s “America First” agenda that often resulted in trade wars.

In anticipation of Biden’s administration, the EU had already announced $4 billion worth of tariffs on US goods in the wake of the Airbus-Boeing dispute. Previously, the Trump administration instituted punitive tariffs on the EU for steel and aluminum, with further tariffs down the line. With Trump gone, the EU expects a much less combative approach to the US-EU trade relations.

Stronger euro further benefits from the weakening of the BREXIT fallout. A major proponent for BREXIT, Dominic Cummings, recently left Prime Minister Johnson’s team. Combined with, still unofficial, Biden victory, more opportunities opened up for a euro-strengthening EU-UK deal. Consequently, the euro jumped by 0.3% to a one-week high of $1.1868.

mRNA Vaccines Launch a New Wave of Market Optimism

Pfizer and German BioNTech were the first to announce the COVID-19 vaccine, followed by Pfizer’s suspicious stock selloff on the same day of the announcement. However, Moderna, using the same experimental mRNA technology, boasts even higher vaccine effectiveness at 94.5%. Late-stage clinical trials are also underway from Johnson & Johnson and AstraZeneca. After a safety-related pause, they restarted the final round of vaccine trials.

We have yet to see how experimental messenger RNA vaccines will unfold on a mass scale, but Dr. Anthony Fauci is already framing vaccines as not enough, emphasizing that many business-debilitating policies will have to continue. Moreover, Pfizer’s CEO, Dr. Albert Bourla, may have sold off 62% of his stock due to the unpredictability of the new experimental vaccine. According to the UK’s Medicines and Healthcare products Regulatory Agency (MHRA), these vaccines will have a high volume of Adverse Drug Reactions (ADRs):

“… it is not possible to retrofit the MHRA’s legacy systems to handle the volume of ADRs that will be generated by a Covid-19 vaccine. Therefore, if the MHRA does not implement the AI tool, it will be unable to process these ADRs effectively. This will hinder its ability to rapidly identify any potential safety issues with the Covid-19 vaccine and represents a direct threat to patient life and public health.”

Considering that COVID-19’s fatality rate for people under 50 years old is 0.02%, we may end up with a situation where the cure is deadlier than the disease, as Pfizer’s CEO stock selloff seems to indicate. In the meantime, the Biden admin assures they don’t intend to impose a nation-wide lockdown.

China Left Covid Fears Many Months Ago

As Western nations entered a deep recession, which ended up benefiting cryptocurrencies, China had stopped testing for COVID-19, given its extremely low fatality rate. Consequently, China exceeded all expectations with increased industrial output at 6.9%, while its retail sector grew by 4.3%. Additionally, on Sunday, November 15, China signed a major trade deal with 14 Asia-Pacific countries, called the Regional Comprehensive Economic Partnership (RCEP). 

As the deal excludes the US, it represents a major geopolitical gain for China, contributing to further weakening of the dollar in the Forex market. Alongside China, Japan, representing the world’s third-largest economy, left the contraction period with a 5% growth in Q3 2020. Like China, Sweden, and other countries, Japan never implemented mass testing or cyclic lockdowns.

It seems that economy-weakening pandemic measures failed to yield extra health benefits, which greatly advantaged other nations. Do you think the US can catch up under the Biden administration?