Euro climbs on vaccine optimism, offshore yuan hits highest since June
2018
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[November 17, 2020] By
Ritvik Carvalho
LONDON (Reuters) - 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 European Union by early next week. [GBP/]
Drugmaker Moderna became the second U.S. pharmaceutical company in a
week to report positive results from trials of a COVID-19 vaccine,
considered necessary to eradicate the pandemic.
Last week, encouraging progress in vaccine testing helped the dollar
rise against the safe-harbour yen and the Swiss franc.
Some of those moves reversed direction on Tuesday, with the yen gaining
back ground against the dollar.
"Euro/dollar remains well-supported, buoyed by global optimism," said
Chris Turner, global head of markets at ING in a note to clients.
"Given the challenges Europe faces – in the middle of a second lockdown
– the euro certainly won't lead the rally against the dollar, but we
think the dollar decline is broad enough 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 and also edged up
0.3% to 89.51 pence per euro.
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Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and
Jordanian dinar banknotes are seen in this illustration taken
January 6, 2020. REUTERS/Dado Ruvic/Illustration
The greenback lost 0.3% to trade at 104.20 yen.
Investors in the dollar were looking ahead to the release of U.S. retail
sales and industrial production later on Tuesday to gauge the health of
the economic recovery.
However, policymakers' response to a record number of coronavirus cases,
hospitalisations and deaths in several U.S. states is likely to remain
of greater concern.
The dollar index against a basket of major currencies stood at 92.431,
its lowest in more than a week.
New infections are also increasing in Britain, Europe and Japan, further
clouding the economic outlook.
The Australian dollar held on to overnight gains against the greenback,
while the New Zealand dollar fell back after hitting its strongest in
more than a year as investors scaled back bets for additional interest
rate cuts.
Minutes from the Reserve Bank of Australia's most recent policy meeting
showed the central bank was ready to provide yet more policy stimulus if
needed after cutting rates to record lows.
The onshore yuan hit its highest since June 2018 against the dollar at
6.5457 as positive economic data continued to support the Chinese
currency.
(Reporting by Ritvik Carvalho; additional reporting by Stanley White in
Tokyo; Editing by Susan Fenton and Alex Richardson)
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