FOREX-Dollar softer on improved risk appetite, yuan soars

* Dollar broadly weak on back of rising risk appetite
* Aussie rises after RBA minutes show no rate cut hints
* Yuan strengthens to 16-month high as data shows solid
economy
* Pound seen vulnerable on no deal Brexit fears
* Fed policy review on Wed key focus
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, Sept 15 (Reuters) - The dollar dipped against riskier
currencies on Tuesday as hopes for a COVID-19 vaccine and big
corporate deals improved investor appetite for riskier
currencies.
The yuan jumped to a 16-month high as a series of Chinese
data points to steady economic recovery in China while the
Australian dollar was bolstered by policy minutes from the
country's central bank which stopped short of signalling a
further cut to the cash rate.
The dollar index =USD slipped to 92.910, pulling away
further from a one-month high of 93.664 touched last Wednesday.
The euro inched up 0.2% to $1.1889 EUR= , extending its
rise into a fifth straight day, with an initial resistance seen
at around last week's high of $1.1917.
The dollar traded at 105.66 yen JPY= , near its two-week
low of 105.55 yen touched on Monday.
Helping sentiment, AstraZeneca AZN.L resumed British
clinical trials of its COVID-19 vaccine, one of the most
advanced in development, while Pfizer Inc PFE.N and BioNTech
SE 22UAy.F proposed expanding their Phase 3 vaccine trial.
"It was uplifting that Pfizer has made clear a target of
vaccines. As risk assets bounced back, the dollar has lost
momentum," said Kyosuke Suzuki, director of forex at Societe
Generale.
Wall Street shares recovered as several multi-billion dollar
deals - including Nvidia's NVDA.O $40 billion purchase of chip
designer Arm - lifted confidence.
The Australian dollar gained 0.4% to $0.7316 AUD=D4 , as
highly anticipated minutes from the central bank's September
monetary policy meeting gave no hint that record low interest
rates will be cut further.
The Chinese yuan rose to a 16-month high in both offshore
and onshore trade, thanks to China's robust economic
fundamentals.
Industrial output accelerated the most in eight months in
August, while retail sales grew for the first time this year,
suggesting the economic recovery is gathering pace as demand
starts to improve more broadly from the coronavirus crisis.
"We have evidence of strong exports from China while Chinese
tourists, who would have spent $260 billion overseas in normal
years, are not going abroad this year, reducing yuan selling,"
said Ei Kaku, senior strategist at Nomura Securities.
"Chinese authorities have not tried to rein in the yuan's
rise for the past couple of weeks even as it has strengthened,
leading people to expect further appreciation in the yuan."
The yuan's strength helped to lift MSCI emerging market
currency index .MIEM00000CUS to a six-month high.
The British pound bounced back to $1.2855 GBP=D4 ,
following a fall of 3.66% last week, showing limited reaction
after the UK government won an initial Parliamentary vote on its
controversial bill to violate the Brexit deal with the European
Union. Still, traders said the currency looks vulnerable as the EU
warns British Prime Minister Boris Johnson's bill would collapse
trade talks and propel the United Kingdom towards a messy
Brexit.
Investors now look to central bank policy meetings in the
United States on Wednesday and in Japan and Britain on Thursday.
This week's Federal Reserve meeting will be its first since
Chairman Jerome Powell unveiled a shift toward greater tolerance
of inflation, effectively pledging to keep interest rates low
for longer.
Projections from Fed policymakers that inflation will remain
below 2% in their economic forecasts, to be extended to 2023
this time, could strengthen expectations that interest rates
will stay low for a long period of time, analysts say.