* Dollar edges down to November 9 lows
* Bitcoin surges above $18,000
* Euro ticks up, investor ignore EU recovery fund hurdles
* Yen recoups over half of vaccine-driven losses
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Julien Ponthus
LONDON, Nov 18 (Reuters) - Pressure increased on Wednesday
against the dollar which hit its lowest level in over a week as
tighter economic restrictions across the United States and
Europe tested market optimism over vaccine trials.
Most notably, the retail sales report released by the U.S.
Commerce Department showed spending decelerating as the holiday
shopping season approaches, amid a lack of fresh fiscal relief
from Washington.
Against a basket of currencies the dollar =USD eased to
92.250, its lowest level since November 9.
"The U.S. Dollar drifted lower overnight following
disappointing U.S. Retail Sales and with increasing concerns
about the downstream effects of the resurgent Covid-19
pandemic", wrote OANDA analyst Jeffrey Halley to his clients.
"That leaves the Federal Reserve meeting well and truly
'live' in December, with further easing likely to add to the
downward pressures on the U.S. Dollar heading into 2021", he
added.
Federal Reserve Chair Jerome Powell said on Tuesday there
was "a long way to go" to economic recovery. Bitcoin BTC=BTSP , sometimes regarded as a haven asset, or
at least a hedge against inflation, continued its surge over
the $18,000 line, a milestone crossed for the first time in
nearly three years.
Amid the uncertainty over the global economic recovery, the
safe-haven Japanese yen climbed to a one-week high.
At 103.85 per dollar, the yen JPY= came back to its
November 9 levels, recouping much of the losses it suffered last
week after Pfizer announced it had developed a working COVID-19
vaccine.
The euro EUR= was rising about 0.2% at $1.1881 with
investors seemingly not worried about Poland and Hungary
blocking the EU's 1.8 trillion euro ($2.14 trillion) financial
package to revive an economy depressed by the COVID-19 pandemic.
"ALL WILL LIVE HAPPILY EVER AFTER"
"It seems likely that in December, when a summit with
physical presence is planned, the EU will accept a compromise on
the breach of the rule of law so that both countries can then
save face and still accept the EU budget and the recovery fund",
Commerzbank strategist Antje Praefcke argued.
"And all will live happily ever after – and therefore no
reason to sell the euro", she added.
Budapest and Warsaw vetoed the adoption of the 1.1 trillion
euro 2021-2027 EU budget and the 750 billion euro recovery fund
on Monday because the budget law included a clause which makes
access to money conditional on respecting the rule of law.
On the Brexit front, UK Business Secretary Alok Sharma said
Britain hoped to get a Brexit trade deal but that the European
Union had to understand it was now dealing with a sovereign
nation.
The statement came after the Sun newspaper reported that
Prime Minister Boris Johnson was told by British negotiators to
expect a Brussels trade deal early next week, with "a possible
landing zone" as soon as next Tuesday. Sterling was rising about 0.3% to in morning trades to
$1.3284 and in striking distance of peaks unseen since the
beginning of September.
British inflation picked up by a little more than expected
in October, pushed higher by prices for clothing and footwear
and food as coronavirus restrictions tightened in much of the
country.