LONDON (Reuters) – The dollar fell on Monday while European shares and riskier currencies gained, with some analysts attributing the pick up in sentiment to U.S. regulators approving a treatment for COVID-19 patients ahead of the Republican National Convention.

More than 800,000 people around the world have died from the coronavirus, with the death toll in the United States alone surpassing 170,000. On Sunday the country granted “emergency use authorization” for treatment using the blood plasma of patients who have recovered from the disease.

Asian shares strengthened overnight and European indexes opened higher. Riskier currencies such as the Norwegian crown NOK=D3, British pound GBP=D3 and Aussie AUD=D3 and Kiwi dollars NZD=D3 rose versus the U.S. dollar.

The dollar was little changed overnight but fell as markets opened in Europe, down around 0.2% at 92.972 by 1053 GMT =USD. It has lost 0.5% against the basket of currencies so far this month, consolidating losses after falling 4% the month before.

Derek Halpenny, MUFG’s head of research, said that the announcement about blood plasma treatment was likely to have only a short-term impact on sentiment.

“I think investors generally will be relatively sceptical of the news especially coming from Trump between now and the election,” he said.

“There’s obviously a very significant incentive for him to speed up the approvals or big up the emergence of some good news.”

“I think the markets are still relatively positioned for a vaccine being done and dusted by year-end and gradually rolled out in the first half of 2021,” he added. “I think it would take a lot for the markets to price in something more rapid than that.”

In a data-light day, market participants are awaiting the start of the four-day Republican National Convention, at which U.S. President Donald Trump will seek to reboot his struggling election campaign.

The euro was up around 0.3% versus the dollar, at $1.183 EUR=EBS.

Last week, the dollar outperformed the euro for the first time since mid-June, as U.S. business activity improved while European business surveys showed the economic recovery faltering.

The euro had previously rallied as the continent controlled the spread of the coronavirus better than in the U.S., and European Union leaders agreed on an EU-wide recovery fund.

France posted a record high in daily post-lockdown infections on Sunday. The health minister on Saturday ruled out a total lockdown but said localised measures could be taken.

Italy also said it was not considering a new lockdown despite a rising number of infections.

“I do think the re-emergence of COVID is going to have a clearer impact on the incoming economic data and certainly the euro gain has been a picture of a more favourable outlook in Europe – not just on COVID but on the policy response and the euro recovery fund etc – but generally that relatively macro story is less compelling,” MUFG’s Halpenny said.

The Australian dollar was up 0.5% versus the greenback at 0.719 AUD=D3, little affected by the country’s treasury saying that effective unemployment will climb above 13%.

New Zealand Prime Minister Jacinda Ardern on Monday extended a coronavirus lockdown in Auckland, the country’s largest city, until the end of the week and introduced mandatory mask wearing on public transport across the nation.

The Kiwi dollar did not strengthen as much as other risk currencies, up 0.2% at 0.6554 NZD=D3.

ING strategists said the market is also grappling with geopolitical concerns, with the protests in Belarus posing the risk of direct intervention by Russia.

Elsewhere, China’s foreign ministry said it would file a lawsuit against the Trump administration over its ban on Bytedance, the Chinese owners of messaging app WeChat and video-sharing app TikTok.

Graphic: World FX rates in 2020 here

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