* Dollar index steady after five sessions of losses
* Yen claws back post-vaccine losses
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SYDNEY, Nov 19 (Reuters) - The dollar nursed losses on
Thursday following five sessions of declines as investors'
longer-term optimism about COVID-19 vaccines ran in to worries
about rising infections and risks to the fragile global economic
recovery.
Small gains against most majors lifted the greenback from
Wednesday's eight-session low against a basket of currencies
=USD , but it remains near the month's trough of 92.129.
Surging coronavirus cases in the United States have exerted
opposing forces on the dollar, with a safety bid supporting the
currency while fresh speculation of monetary easing to boost the
economy has undermined it.
Concern has also driven the safe-haven yen about 0.8% higher
this week, recouping roughly three-quarters of the steep loss it
suffered last week, when Pfizer announced its COVID-19 vaccine.
The yen JPY= was steady at 103.80 per dollar and not far
below its recent eight-month high of 103.18. The risk-sensitive
Australian and New Zealand dollars each eased about 0.2%. AUD/
The euro EUR= has had pandemic problems of its own as
lockdowns spread across the continent. It softened marginally to
$1.1846.
"Immediate risks posed by the surge in infections to the
U.S. and European Union economies have become too large to
ignore," said economist Radhika Rao and currency strategist
Philip Wee from Singapore's DBS Bank in a note on Thursday.
"Negative surprises over Brexit talks are also expected at
the EU Summit today."
The Times newspaper has reported Europe's leaders would
demand the European Commission publish no-deal plans as the
year-end deadline neared. Sterling dipped 0.2% to $1.3237 in Asia.
"There is a very narrow range of possibilities at this
point," said Stephen Innes, a Bangkok-based strategist at
brokerage Axi.
"A skinny free trade agreement with potential concessions on
fisheries and state-aid vs. no-deal risk," he said, with the
latter potentially triggering a 10% drop in sterling.
Elsewhere the South Korean won KRW= dropped 0.6% 1,114.25
per dollar and dealers said they suspected central bank
intervention after the finance minister vowed action to
stabilise the currency market. The Thai baht THB= also softened for a second straight day
and the central bank said it had intervened to slow its recent
rise. EMRG/FRX
FED TO THE RESCUE, AGAIN?
The dollar's gains in the wake of the vaccine announcement
as traders quit safe haven currencies have now nearly evaporated
as selling pressure returned to the greenback through this week.
With fiscal stimulus plans gone by the wayside as President
Donald Trump's refusal to concede electoral defeat consumes
lawmakers' attention, speculation is growing that Federal
Reserve may further loosen monetary at its December meeting.
Two top Fed officials on Wednesday held out the option of
doing more and Treasuries have rallied in anticipation of a
possible expansion of Fed bond buying. "I think there is a reasonable risk that the Fed does have
to do more, because the fiscal response may not come until early
next year - and that's months away," said Commonwealth Bank of
Australia currency analyst Joe Capurso in Sydney.
UBS Global Wealth Management likewise outlined a weaker
dollar as a pillar of their 2021 forecasts this week, mostly
owing to the Fed holding rates very low for a long time.
And all of that has helped to put a rocket under the Chinese
yuan, which has gained more than 9% against the dollar since May
- underpinned by a yawning yield gap.
U.S. jobs figures will be closely watched on Thursday for
guidance on the Fed's next moves and at 1000 GMT European
Central Bank President Christine Lagarde appears at a European
Parliament Committee hearing in Frankfurt.
Bitcoin BTC=BTSP , sometimes regarded as a safe haven or at
least a hedge against inflation, traded over $18,000 during the
Asia session and is within range of its record high at $19,666.
========================================================
Currency bid prices at 3:48PM in Sydney (0448 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1847 $1.1854 -0.06% +5.67% +1.1854 +1.1832
Dollar/Yen JPY=D3 103.7350 103.8200 -0.07% -4.48% +103.9750 +103.7450
Euro/Yen EURJPY= 122.89 123.05 -0.13% +0.77% +123.1200 +122.8500
Dollar/Swiss CHF=EBS 0.9110 0.9112 -0.01% -5.84% +0.9125 +0.9111
Sterling/Dollar GBP=D3 1.3231 1.3268 -0.27% -0.23% +1.3268 +1.3225
Dollar/Canadian CAD=D3 1.3085 1.3085 +0.02% +0.75% +1.3098 +1.3077
Aussie/Dollar AUD=D3 0.7294 0.7306 -0.14% +3.97% +0.7305 +0.7284
NZ NZD=D3 0.6906 0.6923 -0.22% +2.66% +0.6924 +0.6901
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX