BREAKING: Dollar Sellers Return With an Eye on the Fed

Photo: Reuters

SYDNEY (Reuters) - The dollar was under pressure on Tuesday, after closing out its worst month since July with a little bounce and as investors reckon on even more U.S. monetary easing.

The risk-sensitive Australian and New Zealand dollars clawed back some of Monday's losses, each rising roughly 0.2% early in the Asia session, although both remained just below milestone peaks hit a day ago.

The euro rose 0.1% but kept shy of $1.20, while sterling held on to gains made against the dollar as traders cling to hopes for a Brexit trade deal before the year's end.

Investors are heavily short dollars as optimism about promising vaccine trials drives buying of riskier currencies and higher yielding assets outside the United States.

Even worries about rising coronavirus cases have not offered too much support to the greenback, as speculation grows that the Federal Reserve might act to support the economy through a tough winter before vaccinations can turn the tide on the pandemic.

Against a basket of currencies the dollar was steady at 91.942. The safe-haven Japanese yen held its ground at 104.33 per dollar.

Elsewhere in Asia, the South Korean won, which is up more than 7% on the dollar since September, recouped half of a 0.4% drop made on Monday.

The Chinese yuan was firm in offshore trade following solid economic data on Monday.

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