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FOREX-Dollar bounce put on hold as coronavirus vaccine euphoria fades

Published 2020-11-10, 07:28 p/m
EUR/USD
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USD/CHF
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PFE
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DX
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* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

* Dollar steadies as traders eye next steps in coronavirus fight

* New Zealand dollar in focus before central bank meeting

* Rising U.S. coronavirus cases also a concern

By Stanley White

TOKYO, Nov 11 (Reuters) - The dollar's gains were put on hold on Wednesday as optimism about a coronavirus vaccine was offset by worries about how the drug will be delivered and by a surge of new infections in the United States.

The New Zealand dollar is in focus ahead of a central bank meeting later on Wednesday that may shed light on whether policymakers will adopt negative interest rates.

Initial optimism about coronavirus vaccine testing pushed the dollar up against the safe-harbour yen and the Swiss franc, but this momentum is starting to fade because there are still several obstacles to clear before a vaccine can be distributed.

"The dollar recovery is on hold for now because, when you look at the details, there are still a lot of hurdles to clear before any vaccine is rolled out," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.

"However, the dollar is supported by rising Treasury yields, which should help the dollar make another push higher before year's end."

The dollar was last quoted at 105.23 yen JPY=D3 , trading near a three-week high.

Against the euro EUR=D3 , the dollar was little changed at $1.1820.

The British pound GBP=D3 traded at $1.3260, close to a two-month high due to growing optimism that Britain and the European Union will agree a long-sought-after trade deal.

Sterling also held on to overnight gains against the euro EURGBP= .

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

However, the reaction across financial markets has become more tempered because there are several logistical hurdles to making the drug available, including that it has to be shipped at extremely cold temperatures. U.S. states on Tuesday imposed restrictions to curb the spread of the coronavirus as hospitalizations soared, highlighting the difficulty in containing the virus as winter in the Northern Hemisphere approaches. dollar index =USD against a basket of six major currencies was little changed at 92.729.

Elsewhere in currencies, the New Zealand dollar NZD=D3 traded near its highest level against the greenback in more than a year ahead of a Reserve Bank of New Zealand policy meeting that may yield comments about the possibility of negative interest rates.

The central bank is expected to hold rates at 0.25% and introduce a new monetary policy tool to drive borrowing costs lower for lenders. the Tasman Sea, the Australian dollar AUD=D3 held steady against its U.S. counterpart.

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Currency bid prices at 9:05AM (0005 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1820

$1.1812

+0.07%

+5.43%

+1.1822

+1.1812 Dollar/Yen

JPY=D3

105.2300

105.2650

-0.01%

-3.10%

+105.2850 +105.2500 Euro/Yen

EURJPY=

124.37

124.36

+0.01%

+1.98%

+124.4600 +124.3800 Dollar/Swiss

CHF=EBS

0.9150

0.9151

-0.01%

-5.44%

+0.9153

+0.9151 Sterling/Dollar GBP=D3

1.3260

1.3276

-0.10%

+0.00%

+1.3269

+1.3260 Dollar/Canadian CAD=D3

1.3031

1.3036

-0.02%

+0.32%

+1.3036

+1.3028 Aussie/Dollar

AUD=D3

0.7282

0.7287

-0.07%

+3.78%

+0.7289

+0.7280 NZ

NZD=D3

0.6827

0.6832

-0.04%

+1.49%

+0.6833

+0.6828 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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