* Suga set to succeed Abe as Japan PM, focus turns to new cabinet
* Dollar falls to two-week low vs yen
* Dollar under pressure ahead of Fed policy meeting outcome on Wed
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 14 (Reuters) - The dollar slipped on Monday against its major peers, dropping to a two-week low versus the yen, as positive news about a COVID-19 vaccine and a wave of merger and acquisition deals lifted the mood in global equity markets.
Investors also looked ahead to an event-packed week which includes a Federal Reserve meeting and the appointment of a new Japanese premier.
U.S. stocks rose on Monday on signs of progress in developing a COVID-19 vaccine and a flurry of multibillion-dollar deals, including reports of Oracle (NYSE:ORCL) ORCL.N winning the battle for the U.S. arm of TikTok. .N
"As equities trade more positively at the start of the new week, the dollar is trading weaker again. The market is still showing that it is likely to fade any dollar strength," said Vassili Serebriakov, FX strategist at UBS in New York.
Global equities got a lift after drugmaker AstraZeneca AZN.L resumed its British clinical trials of its COVID-19 vaccine, one of the most advanced in development. long as the market perceives that the market is moving in the right direction with the vaccine, the dollar will weaken more as a cyclical play," Serebriakov added.
In morning trading, the dollar index fell 0.4% to 92.919 =USD , after posting two straight weeks of gains.
This week's Fed Reserve meeting will be its first since Chairman Jerome Powell unveiled a policy shift toward greater tolerance of inflation, effectively pledging to keep interest rates low for longer.
"There will be pressure on the Fed to back up the new policy goals with some action," said MUFG strategist Lee Hardman, noting that inflation remained well below target.
"Expectations are they could strengthen forward guidance, possibly by saying rates will be on hold for 3-4 years," said Hardman, who remains bearish on the greenback.
Analysts at Standard Chartered (LON:STAN) said there was a risk the Fed would disappoint dollar bears.
Speculators trimmed net short dollar positions for the second straight week to $32.67 billion, according to Reuters calculations and Commodity Futures Trading Commission data. That's off nine-year highs of $33.68 billion in late August. dollar fell 0.5% against the yen to 105.66 yen JPY=EBS , after earlier sliding to a two-week low.
The Bank of Japan's meeting on Thursday is not expected to yield any policy changes but the bank may be quizzed on whether it could follow the Fed's inflation stance.
On the political front, Chief Cabinet Secretary Yoshihide Suga was picked to head Japan's ruling party on Monday, meaning on Wednesday in parliament he is set to be selected by his peers as prime minister, taking over from Shinzo Abe.
Suga has vowed to continue Abe's policies. euro was up 0.3% versus the dollar at $1.1880 EUR=EBS .
The single currency had spiked to a one-week high above $1.191 after Thursday's European Central Bank meeting, before easing back as policymakers talked it down the next day.
========================================================
Currency bid prices at 10:10AM (1410 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=
$1.1879
$1.1845
+0.29%
+5.97%
+1.1887
+1.1831 Dollar/Yen
JPY=
105.6400
106.1400
-0.47%
-2.96%
+106.1900 +105.6400 Euro/Yen
EURJPY=
125.51
125.75
-0.19%
+2.92%
+125.9000 +125.5300 Dollar/Swiss
CHF=
0.9059
0.9086
-0.30%
-6.40%
+0.9098
+0.9060 Sterling/Dollar GBP=
1.2901
1.2793
+0.84%
-2.70%
+1.2918
+1.2778 Dollar/Canadian CAD=
1.3169
1.3174
-0.04%
+1.41%
+1.3196
+1.3154 Australian/Doll AUD=
0.7294
0.7283
+0.15%
+3.89%
+0.7295
+0.7265 ar
Euro/Swiss
EURCHF=
1.0763
1.0764
-0.01%
-0.82%
+1.0775
+1.0761 Euro/Sterling
EURGBP=
0.9206
0.9254
-0.52%
+8.90%
+0.9263
+0.9202 NZ
NZD=
0.6707
0.6664
+0.65%
-0.43%
+0.6714
+0.6660 Dollar/Dollar
Dollar/Norway
8.9874
9.0336
-0.51%
+2.38%
+9.0531
+8.9861 Euro/Norway
EURNOK=
10.6787
10.7024
-0.22%
+8.55%
+10.7121
+10.6716 Dollar/Sweden
SEK=
8.7595
8.7687
+0.17%
-6.29%
+8.7881
+8.7539 Euro/Sweden
EURSEK=
10.4090
10.3916
+0.17%
-0.58%
+10.4210
+10.3756
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ U.S. Dollar Index & CFTC speculative currency positions
https://tmsnrt.rs/2Q64Zj7
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>