FOREX-Dollar under pressure as vaccine hopes get tested

* Pfizer COVID-19 vaccine trial shows 95% effective
* 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) - The dollar remained under
pressure on Wednesday and briefly dropped to its lowest in over
a week as tighter economic restrictions across the United States
and Europe tested market optimism over vaccine trials.
Pfizer PFE.N announced that the final results from the
late-stage trial of its COVID-19 vaccine showed it was 95%
effective But that had little effect on the dollar
amid concern more monetary stimulus is to be expected from the
Federal Reserve.
Fed Chair Jerome Powell said on Tuesday there was "a long
way to go" to economic recovery and a retail sales report
released by the U.S. Commerce Department showed spending
decelerating. "Markets are mindful that the Fed is in play", said Jeremy
Stretch, head of G10 FX strategy at CIBC Capital Markets.
Against a basket of currencies, the dollar =USD eased 0.1%
to 92.327 after dropping as low as 92.207, its lowest level
since Nov. 9.
Bitcoin BTC=BTSP , sometimes regarded as a safe haven, or
at least a hedge against inflation, rose to more than $18,000
for the first time in nearly three years. It last stood around
$18,200, up over 3%.
The euro EUR= was rising about 0.1% at $1.186, apparently
unconcerned that Poland and Hungary are blocking the European
Union's 1.8 trillion-euro ($2.14 trillion) financial package to
revive an economy depressed by the COVID-19 pandemic.
"It seems likely that in December ... 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 said.
"And all will live happily ever after – and therefore no reason
to sell the euro."
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 that 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 EU had to
understand it was 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 0.2% to $1.3277, near peaks
reached in early September.
British inflation picked up by more than expected in
October, pushed higher by prices for clothing and footwear and
food as coronavirus restrictions tightened in much of the
country.
Amid the uncertainty over the global economic recovery, the
safe-haven Japanese yen climbed to a one-week high.
At 103.95 per dollar, the yen JPY= came back to its Nov. 9
levels, recouping much of the losses it suffered last week after
Pfizer announced it had developed a working COVID-19 vaccine.
China's yuan held near a 29-month high against the dollar,
finishing at its highest since June 26, 2018, despite dollar
buying by major state-owned banks in what some traders suspected
was an effort to slow the Chinese currency's advance towards
6.5-per to the dollar.