Dollar drops as coronavirus treatment hopes boosts risk sentiment

New York (Reuters): The dollar fell on Wednesday as stocks surged after Gilead Sciences reported an encouraging update on a potential treatment for the novel coronavirus, which has shut down businesses and battered the global economy.

Gilead’s experimental antiviral drug remdesivir helped improve symptoms in COVID-19 patients who were given the drug early more than among those who were treated later, the company said.

It also comes as optimism grows that businesses globally are getting closer to reopening, which has boosted risk appetite and reduced demand for the US currency.

“We’re seeing increasing chatter about economies opening up around the world, so that would suggest that the global economic reboots could happen sooner rather than later,” said Joe Manimbo, senior market analyst at Western Business Solutions on Washington. “That’s risk positive and negative for (safe) haven assets.”

The greenback fell 0.26% against a basket of currencies to 99.62, above a two-week low of 99.44 hit on Tuesday.

The Australian dollar, which is seen as a proxy for global growth, jumped 0.57% to $0.6527. It earlier reached $0.6547, the highest since March 10.

The greenback also dipped after data showed that the US economy contracted in the first quarter.