TOKYO- The dollar fell on Wednesday as optimism about a potential coronavirus vaccine was offset by worries about how the drug will be delivered and by a surge of new infections in the United States.
The New Zealand dollar recovered from an early dip to hit its strongest level in more than a year as traders scaled back bets that the central bank would move to negative interest rates.
Initial optimism about coronavirus vaccine testing pushed the dollar up against the safe-harbor yen and the Swiss franc, but this momentum is starting to fade because there are still several obstacles to clear before a vaccine can be distributed.
“The dollar recovery is on hold for now because, when you look at the details, there are still a lot of hurdles to clear before any vaccine is rolled out,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
“However, the dollar is supported by rising Treasury yields, which should help the dollar make another push higher before year’s end.”
The dollar fell 0.15 percent to 105.07 yen, pulling back from a three-week high.
Against the euro, the dollar eased slightly to $1.1829.