* Greenback headed for weekly gain on safe-haven demand
* Hedge fund assault, vaccine hurdles sour mood
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, Jan 29 (Reuters) - The dollar edged higher on Friday,
heading for a weekly gain, as lingering jitters about a
coordinated assault on hedge fund short positions in the United
States boosted demand for safe-haven assets.
The greenback has benefited from safety buying since the
start of the week, when investors fretted that President Joe
Biden's fiscal spending package will not be as large as the
proposed $1.9 trillion.
At the same time, COVID-19 vaccine rollouts globally have
been running into trouble. In Europe, production delays have
snowballed into a spat between the European Union and drugmakers
over how best to direct the limited supplies available.
"The caution in the market's mind hasn't gone away," said
Shusuke Yamada, a currency strategist at Bank of America in
Tokyo. "The dollar and other haven currencies will see some
demand for the time being."
"The more medium-term question is what U.S. fiscal policy
will do to U.S. interest rates, Fed policy, and therefore the
U.S. dollar," he added.
The dollar index =USD gained 0.2% to 90.757 in the Asian
day, bringing its weekly rise to 0.6%.
The greenback advanced 0.3% to 104.52 yen JPY=EBS , another
traditional safe-haven, adding to the previous day's gains of
about 0.2%.
The euro EUR=EBS declined 0.2% to $1.20955.
The U.S. currency, as measured by the dollar index, has
broadly rebounded since dipping to three-year lows at the start
of this month on the view that last year's decline ran too far
too fast.
However, many analysts expect the greenback to return to the
downward trend that saw it lose nearly 7% of its value last year
as the new U.S. government implements massive fiscal spending
while the Federal Reserve maintains its ultra-easy monetary
policy.
"The overall trend does reflect these supply issues around
the U.S. dollar," said Michael McCarthy, chief strategist at CMC
Markets in Sydney.
"Wide expectations of that huge issuance that's coming and
the support of the Fed mean that we're looking in the
medium-term for further U.S. dollar weakness."
========================================================
Currency bid prices at 1:36PM (436 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2098 $1.2121 -0.19% -0.98% +1.2125 +1.2096
Dollar/Yen JPY=D3 104.4900 104.2100 +0.29% +1.19% +104.5570 +104.2750
Euro/Yen EURJPY= 126.43 126.35 +0.06% -0.39% +126.6200 +126.3300
Dollar/Swiss CHF=EBS 0.8898 0.8887 +0.13% +0.58% +0.8901 +0.8887
Sterling/Dollar GBP=D3 1.3702 1.3724 -0.17% +0.28% +1.3729 +1.3696
Dollar/Canadian CAD=D3 1.2866 1.2829 +0.31% +1.06% +1.2870 +1.2819
Aussie/Dollar AUD=D3 0.7640 0.7676 -0.46% -0.67% +0.7682 +0.7637
NZ NZD=D3 0.7153 0.7175 -0.29% -0.38% +0.7177 +0.7153
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>