* AUD, NZD and euro inch higher as traders fade dollar
bounce
* Fed Powell testimony before Congress begins at 1500 GMT
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SYDNEY, Dec 1 (Reuters) - An under pressure U.S. dollar
handed back part of its month-end bounce on Tuesday, as
investors reckoned on more monetary easing by the Federal
Reserve and a gathering recovery elsewhere.
The risk-sensitive Australian and New Zealand dollars edged
higher, with the Aussie AUD=D3 up 0.3% and the kiwi NZD=D3
up 0.5%. The euro EUR= rose 0.3%, though all three currencies
remained below where they sat before Monday's dollar bounce.
Sterling GBP= crept higher as traders clung to hopes for a
Brexit trade deal before the year's end and the yen edged down
to a week low as equities rose with the broadly upbeat mood.
Investors are heavily short dollars as optimism about
promising vaccine trials drives buying of riskier currencies and
higher yielding assets outside the United States. 0#NETUSDFX=
Even worries about rising coronavirus cases have not offered
too much support to the greenback, as speculation grows that the
Federal Reserve might act to support the economy through a tough
winter before vaccinations can turn the tide on the pandemic.
"There's a general view that there'll be something in the
December meeting...given there's no real fiscal development in
the last few months," said BNZ senior markets strategist Jason
Wong.
The Fed meets to set policy on Dec. 15 and 16, though before
then - on Tuesday and Wednesday - Fed Chair Jerome Powell will
appear before Congress and his remarks will be closely watched
for any clues as to the next moves.
The policymakers gather as authorities mull approving two
effective vaccines, developed by Pfizer PFE.N and Moderna
MRNA.O for distribution, while at the same time surging virus
cases have put the brakes on the U.S. economic recovery.
Powell, in prepared remarks released on Monday, said a
"challenging" few months lie ahead and that it is difficult to
assess the economic implications of vaccine developments yet.
"A full economic recovery is unlikely until people are
confident that it is safe to re-engage in a broad range of
activities," he said. Against a basket of currencies the dollar =USD was a
fraction softer at 91.825, after struggling to find traction
above 92.000 on Monday.
Elsewhere in Asia, the Chinese yuan CNH= was back on the
front foot - holding firm onshore and snapping three sessions of
losses in offshore trade after decade-high factory activity
growth figures underscored China's remarkable recovery. CNY/
It last traded at 6.5751 per dollar onshore CNY= .
The Reserve Bank of Australia, meanwhile, left policy
settings unchanged on Tuesday, as expected. Governor Philip Lowe's statement was cautiously optimistic
but said it would take until the end of next year for gross
domestic product to recover 2019 levels and emphasised that the
rebound's momentum depended on policy support.
European inflation figures and U.S. manufacturing data is
due later on Tuesday.
Britain and the European Union also warned each other on
Monday that time was running out to reach a Brexit trade deal,
though investors remain hopeful and have kept the pound GBP=
at $1.3361 and 89.46 pence per euro EURGBP= . Talks between EU chief negotiator Michel Barnier and British
chief negotiator David Frost are ongoing and the EU team are
expected to stay in London for two or three more days. GBP/
"Further talk that we could see a deal in the next few days
makes shorting the pound tough," said Chris Weston, head of
research at brokerage Pepperstone in Melbourne.
"Although once we get a deal, and assuming it does play out,
then sterling may offer some good shorting opportunities as it
turns less political and stands out as a funding currency – the
fiscal situation makes for some incredibly sobering reading."
Bitcoin BTC=BTSP was down about 2% and, at $19,354, just
below a record high of $19,864 hit on Monday. Currency bid prices at 4:00PM in Sydney(0500 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1957 $1.1923 +0.29% +6.66% +1.1960 +1.1927
Dollar/Yen JPY=D3 104.3850 104.3350 +0.10% -3.85% +104.4600 +104.2500
Euro/Yen EURJPY= 124.82 124.39 +0.35% +2.35% +124.9200 +124.4100
Dollar/Swiss CHF=EBS 0.9071 0.9092 -0.22% -6.25% +0.9087 +0.9070
Sterling/Dollar GBP=D3 1.3361 1.3325 +0.27% +0.74% +1.3365 +1.3328
Dollar/Canadian CAD=D3 1.2968 1.3008 -0.30% -0.17% +1.3008 +1.2966
Aussie/Dollar AUD=D3 0.7367 0.7345 +0.31% +5.00% +0.7371 +0.7344
NZ NZD=D3 0.7034 0.7010 +0.36% +4.55% +0.7041 +0.7011
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX