* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Updates prices, adds comment and chart)
By Elizabeth Howcroft
LONDON, Nov 23 (Reuters) - Risk appetite in currency markets was boosted by progress towards a COVID-19 vaccine rollout even as PMI data showed a sharp contraction in euro zone business activity as a result of lockdown restrictions.
AstraZeneca AZN.L on Monday said that its vaccine could be about 90% effective and it will prepare to submit data to authorities around the world that have a framework for conditional or early approval. was the latest in a string of positive vaccine developments after Moderna Inc MRNA.O said on Nov. 16 that its experimental vaccine was 94.5% effective, a week after Pfizer Inc (NYSE:PFE) PFE.N and BioNTech SE 22UAy.F said their candidate had demonstrated greater than 90% efficacy, rising to 95% with analysis of full trial data. had been strong overnight after a top U.S. health official said that vaccinations could begin by mid-December. a market perspective, the vaccine news cements our bullish view on most pro-cyclical currencies against the dollar through the turn of the year," Deutsche Bank (DE:DBKGn) FX strategists Robin Winkler and George Saravelos said in a note to clients.
The dollar, which fell 0.4% against a basket of currencies last week, continued its downward trend as traders' risk appetite grew and was down 0.3% at 92.086 by 1132 GMT. =USD
The dollar also lost out to the yen, with the pair changing hands at 103.725. JPY=EBS
The New Zealand dollar surged to a two-year high after strong retail sales data, reducing the risk of further policy easing. It continued to strengthen in the European session, hitting a fresh two-year high of 0.6966 per dollar. NZD=D3 Australian dollar - a liquid proxy for risk - was up 0.3% at 0.73255. AUD=D3
The Euro-dollar rate crossed $1.19 for the first time in two weeks and was up 0.4% at $1.19005 by 1134 GMT EUR=EBS .
"We won't really unlock euro-dollar much higher unless we can solve the EU-UK trade deal, and the EU budget and recovery fund – those are probably the two things that'll really get it moving," said Kit Juckes, head of FX strategy at Societe Generale (PA:SOGN).
European Union leaders will continue to discuss the bloc's 1.8 trillion euro ($2.14 trillion) COVID-19 recovery plan, which has been vetoed by Poland and Hungary, German Chancellor Angela Merkel said last week. pound was boosted by hopes for a Brexit deal GBP=D3 EURGBP=D3 . The EU's chief Brexit negotiator said that fundamental divergences remain but both sides were pushing hard for a deal. zone PMI data showed that the bloc's business activity contracted sharply in November - even more than expected - as lockdown measures to control the spread of COVID-19 forced many businesses in the service industry to close. bloc's economy is on track for its first double-dip recession in nearly a decade as the coronavirus second wave sweeps across Europe, a Reuters poll suggested last week.
The yuan, meanwhile, was dented by fresh U.S.-China tensions. Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of U.S. goods and technology, according to a draft copy of the list seen by Reuters. dollar was up about 0.1% against the offshore yuan at at 6.5597 CNH=EBS by 1140 GMT. ($1 = 0.8405 euros)
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