(Updates prices)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Dollar supported as safe-harbour currency
* Investors nervous as U.S. election approaches
* Yuan decline put on hold after central bank fixing
* Euro and pound hit by virus and trade talk concerns
By Stanley White
TOKYO, Oct 14 (Reuters) - The U.S. dollar held on to gains
against most currencies on Wednesday as renewed questions about
a coronavirus vaccine and lack of an agreement on additional
U.S. fiscal stimulus prompted a shift to safer assets.
The yuan was little changed versus the dollar after the
central bank's daily fixing of the yuan's mid-point was largely
in line with estimates, suggesting authorities have paused their
attempts to rein in the currency.
The euro and British pound are likely to extend declines,
analysts said, as a return of restrictions on economic activity
in Europe and Britain to battle a second wave of coronavirus
infections unnerves investors. Currency moves, however, are likely to be subdued as the
U.S. presidential election looms on Nov. 3, but analysts said
sentiment is leaning against riskier bets, which should support
the dollar in the coming days.
"Many factors are pointing to more upside for the dollar,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities.
"U.S. stimulus may not come until after the election. The
People's Bank of China is halting the yuan's rise. There's no
reason to buy the euro, and there are a lot of euro longs that
need to be unwound."
The dollar last stood at $1.1743 per euro EUR=D3 , holding
on to a 0.6% gain from the previous session.
The pound GBP=D3 traded at $1.2926, nursing a 1% loss from
Tuesday.
Sterling also took a hit due to worries about little
progress in trade talks between Britain and the European Union
and the chance the Bank of England will adopt negative interest
rates. Risk appetite has weakened after Johnson & Johnson JNJ.N
said on Tuesday it is pausing a clinical trial of a coronavirus
vaccine and Eli Lilly and Co LLY.N also said it paused a
coronavirus antibody treatment. Hopes are fading that U.S. Republicans and Democrats will
reach a compromise on a new round of fiscal stimulus, which
would deal a blow to the economic outlook.
Both developments are supporting the dollar, traders said.
The onshore yuan CNY=CFXS last traded at 6.7408 per
dollar. On Monday the yuan posted its biggest daily fall in
seven months after the central bank cut foreign exchange forward
reserve requirements, which makes it cheaper to short the
currency.
The Australian dollar AUD=D3 was little changed but is
likely to add to its 1% decline on Tuesday due to concern about
a row with Beijing over coal imports, traders said.
Across the Tasman Sea, the New Zealand dollar NZD=D3 edged
higher against its U.S. counterpart.
Reserve Bank of New Zealand Assistant Governor Christian
Hawkesby said on Wednesday that some economic data have
surprised to the upside.
But he also said the central bank's discussion of negative
interest rates is "not a game of bluff". Currency bid prices at 2:19PM (0519 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1741 $1.1745 -0.03% +4.72% +1.1752 +1.1736
Dollar/Yen JPY=D3 105.4300 105.4600 -0.05% -2.96% +105.5000 +105.3350
Euro/Yen EURJPY= 123.79 123.89 -0.08% +1.51% +123.9500 +123.6500
Dollar/Swiss CHF=EBS 0.9150 0.9149 +0.03% -5.43% +0.9155 +0.9147
Sterling/Dollar GBP=D3 1.2914 1.2937 -0.19% -2.65% +1.2943 +1.2911
Dollar/Canadian CAD=D3 1.3139 1.3136 +0.03% +1.15% +1.3157 +1.3134
Aussie/Dollar AUD=D3 0.7167 0.7161 +0.08% +2.14% +0.7174 +0.7153
NZ NZD=D3 0.6657 0.6648 +0.17% -1.04% +0.6665 +0.6645
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX