News: FOREX-China reopening hopes keep dollar on guard

The dollar was kept on the back foot on Tuesday by strength in the Chinese yuan and other currencies sensitive to China's growth, as markets clung to hopes that China's restrictive zero-tolerance approach to COVID-19 will eventually ease.
The yuan had its best day in two years on Friday and managed to hold most of its gains through a choppy Monday. It was firm at 7.2200 per dollar in offshore trade on Tuesday CNH=D3 .
The euro EUR=EBS , linked via German exports to China's economy, regained parity on the dollar overnight and hovered at $1.0026. The New Zealand dollar NZD=D3 climbed 0.2% to touch a seven-week high of $0.5951 in early Asia trade.
U.S. voters go to the polls in midterm elections later in the day, with a Republican victory and consequently gridlock in Congress forecast. A conclusive result could take days, but is unlikely to move currency markets if it meets expectations.
China's strict virus policy includes lockdowns, quarantining and rigorous testing, and officials said over the weekend the measures are "completely correct" and will stay. But incremental adjustments have been enough to keep traders' hopes alive.
"Where there's smoke, eventually there's fire, so the market is pricing in improved optimism, though at the moment it's all based on hopes," said Rodrigo Catril, senior currency strategist at National Australia Bank in Sydney.
"It's very CNY and pro-growth supportive," he said. "This idea that maybe in 2023, we'll see a gradual reopening in China means that growth prospects in China should improve significantly, against a backdrop where most expect the U.S. economy to start slowing down."
The growth-sensitive Australian dollar AUD=D3 is up two sessions in a row and last bought $0.6486, within range of its 50-day moving average at $0.6516.
The South Korean won KRW=KFTC rose 1%. The Japanese yen JPY=EBS hit a one-week high of 146.35 per dollar. Japanese foreign currency reserves posted the second-sharpest monthly decline on record in October as authorities spent 6.35 trillion yen intervening to support the yen.
Bank of Japan policymakers debated the need to look out for the side-effects of prolonged monetary easing and the potential impact of a future exit from ultra-low interest rates, a summary of opinions at their October policy meeting showed on Tuesday.
Sterling GBP=D3 held sharp overnight gains made as a disappointing auction lifted gilt yields a bit. It was last at $1.1531, though traders are wary of chasing it too much higher ahead of a fiscal update expected on Nov. 17.
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	Currency bid prices at 0045 GMT 
 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS																	   
							  $1.0031		 $1.0017	+0.14%		  -11.76%	 +1.0031	 +1.0014 
																								 
 Dollar/Yen		JPY=EBS																	   
							  146.3300		146.4950   -0.09%		  +0.00%	  +146.7050   +146.3600 
																								 
 Euro/Yen		 
				  S>		  146.78		  146.91	 -0.09%		  +12.63%	 +146.9800   +146.7600 
																								 
 Dollar/Swiss	  CHF=EBS																	   

							  0.9877		  0.9887	 -0.06%		  +8.33%	  +0.9891	 +0.9880 
																								 
 Sterling/Dollar   GBP=D3																		

							  1.1535		  1.1516	 +0.17%		  -14.70%	 +1.1535	 +1.1507 
																								 
 Dollar/Canadian   CAD=D3																		

							  1.3479		  1.3492	 -0.10%		  +6.60%	  +1.3498	 +1.3478 
																								 
 Aussie/Dollar	 AUD=D3																		

							  0.6490		  0.6482	 +0.14%		  -10.71%	 +0.6490	 +0.6472 
																								 
 NZ				NZD=D3																		

 Dollar/Dollar				0.5948		  0.5941	 +0.14%		  -13.08%	 +0.5952	 +0.5938 
																								 
																								 
 All spots  FX=  
Tokyo spots  AFX=  Europe spots  EFX=   Volatilities  FXVOL=   Tokyo Forex market info from BOJ  TKYFX  
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World FX rates	https://tmsnrt.rs/2RBWI5E 

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