Greenback Firms Up On Month-End Flows, Questions Surrounding Vaccine Effectiveness

USD & CHF gained on safe haven demand, with DXY edging higher amid month-end flows. Concerns over the spread of new strains of the coronavirus and the effectiveness of some Covid-19 vaccines continued to linger, following reports that the Novavax product is less effective against the South African variant of the pathogen & Germany's decision not to administer the AstraZeneca jab to people over 65 years old.

• JPY struggled for any momentum again, despite broader risk aversion. USD/JPY climbed past its 100-DMA, it may have drawn some support from flows ahead of the next Gotobi Day, which falls on a Saturday. Worth noting that $1.3bn worth of options with strikes at Y104.35-45 expire at today's NY cut.
• AUD faltered as iron ore prices remained heavy, while BBG trader source flagged AUD/NZD sales by short-term accounts in reaction to the aforementioned reports re: German doubts over AstraZeneca jab for the elderly. Australia secured 1.2mn doses of the vaccine for Feb, with exp. of 1.6mn more. AUD/NZD dipped under its 100-DMA, with bears hoping for a close below that moving average.
• The kiwi held up relatively well after ANZ Consumer Confidence improved a tad, NZ Tsys financial statements showed narrower deficit than forecast, the RBNZ announced its second QE taper this month, while NZ health officials said they see no evidence of community transmission of Covid-19 in the country.
• The PBOC fixed USD/CNY at CNY6.4709, 38 pips above the CNY6.4671 estimate. The sell side estimates could have been skewed today given the large trading range for the yuan, which has strengthened heading into month-end. The bank injected a net CNY98bn via OMOs after draining around CNY325bn so far this week.
• Personal income/spending, final U. of Mich. Survey & MNI Chicago PMI out of the U.S., German & Norwegian jobless rates as well as German, French & Canadian GDPs take focus on the data front. Central bank speaker slate features Fed's Kaplan & Daly.