The U.S. Dollar was weak against most major currencies on Wednesday amid an improvement in risk sentiment following positive developments on the coronavirus vaccine front.

Biotech firm Moderna (MRNA) said its experimental vaccine for Covid-19 was safe and produced strong immune responses in all 45 patients in an ongoing early-stage human trial.

An interim analysis of the open-label Phase 1 study of the vaccine candidate was published in the New England Journal of Medicine.

Coming close on the heels of recent positive news about vaccines from a few other drugmakers and research firms, the announcement from Moderna has raised optimism that that the threat posed by the pandemic could be addressed in the relatively near future.

In economic news today, a report from the Federal Reserve showed U.S. industrial production soared by 5.4% in June after jumping by 1.4% in May. Economists had expected production to surge up by 4.3%. Despite the substantial increase, the Fed noted industrial production remained 10.9% below its pre-pandemic February level.

Following four consecutive months of contraction, the Federal Reserve Bank of New York released a report on Wednesday showing New York manufacturing activity expanded in the month of July.

The New York Fed said its general business conditions soared to a positive 17.2 in July from a negative 0.2 in June, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to jump to 10.0.

A report from the Labor Department said import prices shot up by 1.4% in June after climbing by a downwardly revised 0.8% in May. Economists had expected import prices to jump by 1%.0 percent, matching the increase originally reported for the previous month.

The Labor Department said export prices also soared by 1.4 percent in June after rising by a downwardly revised 0.4 percent in May.

Export prices were expected to climb by 0.8 percent compared to the 0.5 percent increase originally reported for the previous month.

The dollar index slipped to 95.78 around mid morning, but recovered to around 96.10 subsequently. It was last seen at 96.04, down 0.23% from previous close.

Against the Euro, the dollar weakened to $1.1453, but subsequently pared most of its losses and was last seen at $1.1410, down by about 0.1%.

The Pound Sterling was stronger at $1.2586, despite retreating from $1.2650. UK consumer price inflation accelerated unexpectedly in June, data from the Office for National Statistics showed. Consumer price inflation rose to 0.6% from 0.5% in May. The rate was expected to slow to 0.4%.

Confounding expectations for a decline of 0.2%, consumer prices gained 0.1% on a monthly basis after remaining unchanged in May. Excluding energy, food, alcoholic beverages and tobacco, core inflation advanced to 1.4% from 1.2% in May. The rate was forecast to remain unchanged at 1.2%.

The yen firmed up to 106.93 a dollar, rallying from 107.23 yen a dollar Tuesday evening.

Against the Aussie, the dollar slipped to $0.7006 from $0.6975.

The Swiss franc was weak at 0.9445 a dollar, compared with previous close of 0.9400 a dollar, while the Loonie firmed up, gaining more than 0.3% to US$0.7006.

The Bank of Canada today left its interest rate unchanged at 0.25% and said the rate will have to stay low to provide "extraordinary monetary policy support" to help recuperate from the economic impact of COVID-19.

In its policy statement, the bank said it expects the economy to contract by 7.8% this year, driven downward by a year-over-year contraction of 14.6% in the second quarter. Annual inflation rate is pegged at 0.6% this year, rising 1.2% in 2021 and 1.7% in 2022.

Dollar Stays Weak Against Peers As Risk Sentiment Improves