- Currencies little moved on coronavirus vaccine progress
- Growing unease about current rise in new infections
- Traders in Asia focus on yuan's rise against greenback
The dollar steadied against most currencies on Tuesday as a return of coronavirus restrictions in some U.S. states and worries about a smooth transition for President-elect Joe Biden offset optimism about a coronavirus vaccine.
Meanwhile sterling edged higher on media reports Britain could reach a post-Brexit trade agreement with the European Union by early next week.
Drugmaker Moderna MRNA.O became the second U.S. pharmaceutical company in a week to report positive results from trials of a COVID-19 vaccine, considered necessary to eradicate the pandemic.
Last week, encouraging progress in vaccine testing helped the dollar rise against the safe-harbour yen and the Swiss franc.
However, reaction in the currency market to subsequent developments has been subdued as the United States struggles to contain a second wave of infections, and with vaccine distribution not expected any time soon.
There is also some uncertainty about Biden's plans to tackle the coronavirus and stimulate the economy as the Trump administration resists cooperation with Biden's transition team.
"The market reaction has been limited because it will take time to distribute the vaccine, and there is uncertainty about U.S. politics," said Masafumi Yamamoto, chief foreign exchange strategist at Mizuho Securities in Tokyo.
"Unless we clear that hurdle, the dollar won't rise. The dollar looks particularly weak against the yuan."
The dollar was quoted at $1.1857 per euro EUR=D3 , on course for its fourth straight session of declines.
Sterling was quoted at $1.3213 and also edged up to 89.71 pence per euro EURGBP=D3 .
The greenback held steady at 104.50 yen JPY=D3 . Investors in the dollar are looking ahead to the release of U.S. retail sales and industrial production later on Tuesday to gauge the health of the economic recovery.
However, policymakers' response to a record number of coronavirus cases, hospitalisations, and deaths in several U.S. states is likely to remain of greater concern.
The dollar index =USD against a basket of major currencies stood at 92.532, close to a one-week low.
New infections are also increasing in Britain, Europe, and Japan, further clouding the economic outlook.
The Australian dollar AUD=D3 held onto overnight gains against the greenback, while the New Zealand dollar NZD=D3 hit its strongest in more than a year as investors scaled back bets for additional interest rate cuts.
Minutes from the Reserve Bank of Australia's most recent policy meeting showed the central bank was ready to provide yet more policy stimulus if needed after cutting rates to record lows.
The onshore yuan CNY=CFXS hit a new 28-month high of 6.5623 as positive economic data continues to support the Chinese currency.
======================================================== Currency bid prices at 3:35PM (0635 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR=EBS $1.1857 $1.1852 +0.05% +5.77% +1.1867 +1.1851 Dollar/Yen JPY=D3 104.5000 104.5250 -0.03% -3.80% +104.5750 +104.4400 Euro/Yen EURJPY= 123.92 123.93 -0.01% +1.62% +124.0200 +123.8700 Dollar/Swiss CHF=EBS 0.9122 0.9124 -0.02% -5.73% +0.9128 +0.9117 Sterling/Dollar GBP=D3 1.3213 1.3202 +0.08% -0.38% +1.3233 +1.3192 Dollar/Canadian CAD=D3 1.3078 1.3073 +0.05% +0.69% +1.3080 +1.3065 Aussie/Dollar AUD=D3 0.7315 0.7321 -0.08% +4.25% +0.7330 +0.7312 NZ NZD=D3 0.6896 0.6905 -0.10% +2.51% +0.6918 +0.6894 Dollar/DollarAll spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
