SYDNEY- The dollar held broad gains on Thursday as investors tempered bullish expectations about a COVID-19 vaccine, while the kiwi hovered at an almost 20-month peak as the odds lengthened on New Zealand imposing negative interest rates.
The dollar index was steady through the Asia session and has added about 0.8 percent this week, mainly thanks to heavy selling in haven currencies such as the Swiss franc and Japanese yen, and weakness in the euro as COVID-19 cases surge in Europe.
Sterling also nursed losses as trade talks between Britain and the European Union seemed set to drag on past yet another deadline, raising the prospect that no trade deal is reached before Brexit transition arrangements end on Dec. 31.
The moves have put the brakes on a long a precipitous drop for the world’s reserve currency, which shed about 10 percent against a basket of currencies between March and the announcement of Pfizer’s working COVID-19 vaccine on Monday.
“I think we had a speculative market that was increasingly comfortable being short US dollars,” said National Australia Bank’s head of foreign exchange strategy, Ray Attril.