Risk sentiment has improved somehow after reports from Pfizer

The risk-off tone continues to dominate global financial markets on Tuesday, with US stock index futures reversing early gains ahead of the opening bell. Meanwhile, European stocks stay afloat due to the latest report that two doses of Pfizer-BioNTech vaccine give 70% protection against the new variant. Meanwhile, France said there are no plans to change current protocols to curb the spread of COVID-19. 

On the data front, the ILO unemployment rate in the UK edged lower to 4.2% during the three months to October while the number of people claiming unemployment-related benefits declined by 49,800 last month. The report added to a more upbeat tone in the European markets and lifted the pound as well. In the US, November NFIB small business optimism index arrived at 98.4 versus 98.2 in the previous month. 

Of note, as the safe-haven demand has eased somehow, the dollar retreated from one-week highs in recent trading. As such, GBPUSD climbed back to the 1.3250 area from the levels below 1.3200. Meanwhile, EURUSD is now changing hands around 1.1320 to erase Monday’s losses. However, the recovery looks fragile as the dollar could regain the upside momentum at any point, with traders betting on a faster tapering by the Federal Reserve. The two-day policy meeting concludes on Wednesday. 

Elsewhere, gold prices struggle below the key moving averages on Tuesday despite a weaker greenback. The precious metal still lacks the momentum to overcome the $1,790 region while holding in a tightening range around this immediate barrier, followed by the $1,800 psychological level. Should dollar bulls reenter the game in the short term, the bullion may retarget the $1,770 area and see even deeper losses in the coming days. 


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