News: FOREX-Dollar rises again as markets adjust to vaccine hope and higher yields

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    • Euro falls to lowest vs US dollar in a week
    • New Zealand dollar hits strongest since March 2019
    • Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

    (Recasts, adds comment, updates prices)

    The U.S. dollar rose and the safe-haven yen weakened again on Wednesday as the markets continued to adjust to higher interest rates and prospects for economic growth following news on Monday of encouraging results for a coronavirus vaccine.

    The euro fell to its lowest level against the dollar in a week as yields on U.S. bonds rise compared with those on European bonds. And, the New Zealand dollar soared to its strongest in a year and a half as traders scaled back bets that the central bank there would move to negative interest rates.

    The dollar has started moving up with gains in equities in a switch from its safe-haven status during the COVID-19 crisis when it tended to move in the opposite direction, said Erik Nelson, macro strategist at Wells Fargo Securities.

    "This is a huge change from what we've seen over the past few months," said Nelson. "The increase we've seen in U.S. yields could be a really important inflection point for seeing that equity-dollar relationship to evolve," Nelson said. "When you look at real or nominal yields, it's really becoming increasingly attractive to own dollars rather than euros."

    The yield on 10-year U.S. Treasury notes rose to 0.972% on Wednesday, up from 0.82% on Friday. The dollar =USD was up 0.5% on Wednesday against a basket of currencies after a flat day on Tuesday and a rise of 0.5% on Monday.

    Tuesday's pause in the dollar's move showed continued restraint and caution about how beneficial the new vaccine will be and when. Coronavirus cases are increasing daily in the U.S. and Europe.

    "People are taking a little more prescripted approach to the vaccine. The news is undoubtedly positive, but of course we need to delve into the detail and think about the ramifications of the whole process," said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets. "We need to remember that this is a vaccine which is unproven in terms of certification."

    The euro was down 0.5% on the day EUR=EBS to $1.175 against the dollar. The U.S. dollar rose 0.3% to 105.59 versus the Japanese yen JPY=EBS .

    "With the global daily infections from the coronavirus accelerating yesterday, it seems that concerns over the pandemic's economic impact may have limited further gains in equities and other risk-linked assets," said Charalambos Pissouros, senior market analyst at JFD Group.

    "It is still too early to start cheering that the COVID era is behind us," he said. The dollar gained 0.7% against the trade-sensitive Norwegian crown to 9.087 NOK=D3 . The Aussie dollar fell 0.3% to 0.7263 AUD=D3 .

    Sentiment for the dollar got a boost on Monday after Pfizer Inc PFE.N and BioNTech 22UAy.DE said on Monday their experimental coronavirus vaccine was 90% effective.

    		======================================================== 
    	Currency bid prices at 10:12AM (1512 GMT) 
    
     Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
    											  Previous				   Change				  
    											  Session											
     Dollar index	  =USD	   $93.1520	   92.7260	 +0.47%		 +0.00%	  +93.2000	+92.6070 
     Euro/Dollar	   EUR=EBS	$1.1753		$1.1812	 -0.50%		 +4.83%	  +1.1833	 +1.1746 
     Dollar/Yen		JPY=D3	 105.5900	   105.2650	+0.26%		 -2.84%	  +105.5900   +105.0200 
     Euro/Yen		  EURJPY=	124.08		 124.36	  -0.23%		 +1.75%	  +124.6700   +123.9300 
     Dollar/Swiss	  CHF=EBS	0.9180		 0.9151	  +0.33%		 -5.12%	  +0.9192	 +0.9139 
     Sterling/Dollar   GBP=D3	 1.3207		 1.3276	  -0.53%		 -0.43%	  +1.3314	 +1.3205 
     Dollar/Canadian   CAD=D3	 1.3058		 1.3036	  +0.21%		 +0.56%	  +1.3075	 +1.3010 
     Aussie/Dollar	 AUD=D3	 0.7263		 0.7287	  -0.32%		 +3.53%	  +0.7318	 +0.7262 
     Euro/Swiss		EURCHF=	1.0787		 1.0809	  -0.20%		 -0.60%	  +1.0824	 +1.0783 
     Euro/Sterling	 EURGBP=	0.8896		 0.8900	  -0.04%		 +5.23%	  +0.8919	 +0.8862 
     NZ				NZD=D3	 0.6867		 0.6832	  +0.53%		 +2.07%	  +0.6903	 +0.6809 
     Dollar/Dollar																				   
    
     Dollar/Norway	 NOK=D3	 9.0870		 9.0235	  +0.73%		 +3.62%	  +9.0995	 +8.9780 
     Euro/Norway	   EURNOK=	10.6815		10.6467	 +0.33%		 +8.58%	  +10.6955	+10.6067 
     Dollar/Sweden	 SEK=	   8.6595		 8.6106	  +0.03%		 -7.36%	  +8.6744	 +8.6003 
     Euro/Sweden	   EURSEK=	10.1773		10.1740	 +0.03%		 -2.79%	  +10.1955	+10.1650                    
 
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