FOREX-Dollar rises as growth worries weigh on euro

* Euro 0.2% lower to dollar
* Commodity currencies rise
* Sterling stronger on the day

(New throughout, updates prices, market activity, comments to
U.S. market open; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Jan 20 (Reuters) - The dollar edged higher against
the euro on Wednesday as the risk of extended lockdowns in
Europe to combat the spread of COVID-19 and worries about the
pace the rollout of vaccines weighed on the common currency.
European countries are struggling to contain the contagion
of the coronavirus amid worries that a new variant of the virus
could lead to more stringent lockdowns and more economic pain.
Investors are also fretting about the slower pace of the
rollout of vaccines relative to the United States and Britain
may hobble economic recovery in the region.
Germany's most populous state, North-Rhine Westphalia, said
on Wednesday it would delay the opening of new vaccination
centres to Feb. 8 due to a temporary slowdown of deliveries of
vaccines from Pfizer PFE.N and its German partner Biotech
22UAy.DE . "The euro slipped as the risk of longer lockdowns in Europe
kept alive the threat of a double-dip recession," Joe Manimbo,
senior market analyst at Western Union Business Solutions, in
Washington, said in a note.
The dollar was 0.2% higher against the euro, ahead of
Thursday's European Central Bank meeting, which, after the broad
easing of monetary policy last month, is unlikely to produce any
major change.
Investors' appetite for riskier currencies was generally
firm ahead of Joe Biden's inauguration as U.S. president at noon
(1700 GMT) in Washington.
"The new administration is expected to push an agenda of
stronger stimulus of nearly $2 trillion in a bid to put the
recovery on a better path," Manimbo said.
U.S. Treasury Secretary nominee Janet Yellen urged lawmakers
at her confirmation hearing to "act big" on stimulus spending
and said she believes in market-determined exchange rates,
without expressing a view on the dollar's direction.
The risk-sensitive Australian dollar was 0.79% higher on the
day, while the New Zealand dollar rose 0.69%.
While the dollar has perked up in recent weeks on the back
of a rise in U.S. Treasury yields, investors still expect the
currency to weaken.
Positioning data shows investors are overwhelmingly short
dollars as they figure that budget and current account deficits
will weigh on the greenback. 0#NETUSDFX=
A combination of heightened risk appetite in global markets
and UK-specific optimism lifted the pound on Wednesday, as it
strengthened to its highest in nearly three years against the
dollar. GBP=D3

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