FOREX-Yen up on vaccine worries, tech selloff

* Dollar steadies after gains
* Oil-linked currencies fall
* Brexit tensions push sterling down
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Olga Cotaga
LONDON, Sept 9 (Reuters) - A stronger Japanese yen was the
product of a build-up of worries in financial markets on
Wednesday, after U.S. tech stocks sold off the previous day and
a leading coronavirus vaccine candidate faced delay.
The U.S. dollar also found some support as the stock market
slide spooked investors into selling riskier currencies, while
worries about the fate of Brexit talks pushed the pound down to
a new six-week low.
In the early European session the dollar was mostly steady,
pulling back from early gains against most majors as U.S. equity
futures pared losses - with Nasdaq 100 futures NQc1 swinging
to trade 0.4% higher and S&P 500 futures ESc1 rising 0.6%.
AstraZeneca Plc AZN.L said it had paused global trials,
including large late-stage trials, of its experimental
coronavirus vaccine due to an unexplained illness in a study
participant. Roll-out of an effective vaccine is seen as key for
economies to overcome the effects of the pandemic.
"Positioning in FX and other asset classes had been biased
towards 'risk on', higher equity prices, steeper yield curves
and a weaker dollar. A lot of that positioning is now simply
getting walked back and tweaked as we enter the 'autumn
crunch'," said Stephen Gallo, currency analyst at BMO Capital
Markets.
Traders, returning from summer holidays, are faced with a
bouquet of risk factors as they enter the autumn period of
trading - the U.S. election in November, Brexit, U.S.-China
trade tensions, central bank policy decisions, rising cases of
the coronavirus - many of which would dent the appetite for
riskier assets and inject strength into safe-havens.
Gallo, however, does not "yet think this move lower in the
dollar is a complete shift in the downward trend, but we will
continue to watch it very closely," he said. The dollar has been
sliding since March.
Euro/dollar was last trading steady at $1.1772 EUR=EBS ,
having fallen earlier to a near three-week low of $1.1757 as the
dollar rose.
Dollar/Japanese yen fell 0.1% at 105.92 JPY=EBS after
touching an eight-day low of 105.78.
Investors await Thursday's European Central Bank meeting
with some trepidation.
The common currency has lost about 2% since posting a
28-month high above $1.20 on Sept. 1, spurred lower by comments
from ECB chief economist Philip Lane who said the exchange rate
mattered to monetary policy.
Any hint of concern at the currency's rise, or that low
inflation will require ultra-easy policy for a very long time
could whack the euro lower again and boost the dollar.
"Lane appears to have succeeded in drawing a line in the
sand at $1.20 at least for the time being," said Rabobank senior
FX strategist Jane Foley. "We see scope that euro/dollar could
dip further towards the $1.17 level on a one-month view."
An overnight slump in the oil price dragged down oil
exporters' currencies. The Norwegian crown NOK=D3 extended an
overnight fall to hit a more than six-week low of 9.1810 per
dollar and was last down 0.3% at 9.1205.
The Canadian dollar CAD=D3 dropped to a three-week low,
though steadied in European trading ahead of a Bank of Canada
policy decision due at 1400 GMT. Investors expect no changes to
interest rates and will focus on the tone around the outlook.
Sterling was unable to shake pressure as fears grow that
Britain is preparing to undercut its Brexit divorce treaty. It
dipped 0.3% to $1.2948 GBP=D3 , after touching its lowest since
July 29. The pound also languished at a six-week low of 91.06
pence against the euro EURGBP=D3 .
Britain will set out its blueprint for life outside the
European Union on Wednesday, publishing legislation a government
minister acknowledged would break international law in a
"limited way".