The dollar fell on Wednesday as optimism about a potential coronavirus vaccine was offset by worries about how the drug will be delivered and by a surge of new infections in the United States.
The New Zealand dollar recovered from an early dip to hit its strongest level in more than a year as traders scaled back bets that the central bank would move to negative interest rates.
Initial optimism about coronavirus vaccine testing pushed the dollar up against the safeharbour yen and the Swiss franc, but this momentum is starting to fade because there are still several obstacles to clear before a vaccine can be distributed.
The dollar recovery is on hold for now because, when you look at the details, there are still a lot of hurdles to clear before any vaccine is rolled out, said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
However, the dollar is supported by rising Treasury yields, which should help the dollar make another push higher before years end.
The dollar fell 0.15 to 105.07 yen, pulling back from a threeweek high.
Against the euro, the dollar eased slightly to 1.1829.
The British pound traded at 1.3273, close to a twomonth high due to growing optimism that Britain and the European Union will agree a longsoughtafter trade deal.
Sterling, however, surrendered some of its overnight gains against the euro.
Sentiment for the dollar got a boost after Pfizer Inc and BioNTech said on Monday their experimental coronavirus vaccine…