FOREX-Euro climbs on vaccine optimism, offshore yuan hits highest since June 2018
LONDON, Nov 17- The euro rose against the dollar on Tuesday, helped by optimism over another coronavirus vaccine, while the Chinese yuan hit its highest against the U.S. currency since June 2018. Europe’s shared currency, however, fell against a broadly stronger pound, which gained on media reports that Britain could reach a post-Brexit trade agreement with the…
* Euro climbs on vaccine optimism
* Sterling gains on Brexit deal hopes
* Dollar weakens to more than 1-week low
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Ritvik Carvalho
LONDON, Nov 17 (Reuters) – The euro rose against the dollaron Tuesday, helped by optimism over another coronavirus vaccine,while the Chinese yuan hit its highest against the U.S. currencysince June 2018.
Europe’s shared currency, however, fell against a broadlystronger pound, which gained on media reports that Britain couldreach a post-Brexit trade agreement with the European Union byearly next week.
Drugmaker Moderna became the second U.S.pharmaceutical company in a week to report positive results fromtrials of a COVID-19 vaccine, considered necessary to eradicatethe pandemic.
Last week, encouraging progress in vaccine testing helpedthe dollar rise against the safe-harbour yen and the Swissfranc.
Some of those moves reversed direction on Tuesday, with theyen gaining back ground against the dollar.
“Euro/dollar remains well-supported, buoyed by globaloptimism,” said Chris Turner, global head of markets at ING in anote to clients.
“Given the challenges Europe faces – in the middle of asecond lockdown – the euro certainly won’t lead the rallyagainst the dollar, but we think the dollar decline is broadenough to drag euro/dollar back to $1.1920.”
The euro last traded 0.2% higher to the dollar at $1.18770.
Sterling last traded half a percent higher at $1.3266 andalso edged up 0.3% to 89.51 pence per euro.
The greenback lost 0.3% to trade at 104.20 yen.
Investors in the dollar were looking ahead to the release ofU.S. retail sales and industrial production later on Tuesday togauge the health of the economic recovery.
However, policymakers’ response to a record number ofcoronavirus cases, hospitalisations and deaths in several U.S.states is likely to remain of greater concern.
The dollar index against a basket of major currenciesstood at 92.431, its lowest in more than a week.
New infections are also increasing in Britain, Europe andJapan, further clouding the economic outlook.
The Australian dollar held on to overnight gainsagainst the greenback, while the New Zealand dollarfell back after hitting its strongest in more than a year asinvestors scaled back bets for additional interest rate cuts.Minutes from the Reserve Bank of Australia’s most recentpolicy meeting showed the central bank was ready to provide yetmore policy stimulus if needed after cutting rates to recordlows.
The onshore yuan hit its highest since June 2018against the dollar at 6.5457 as positive economic data continuedto support the Chinese currency.(Reporting by Ritvik Carvalho; additional reporting by StanleyWhite in Tokyo; Editing by Susan Fenton and Alex Richardson)
