Dollar steadies amid rising global coronavirus cases

© Reuters. Illustration photo of a U.S. five dollar note

By Eimi Yamamitsu

TOKYO (Reuters) - The dollar was hemmed into a narrow range on Monday, as traders weighed the economic impact from a resurgence of global coronavirus cases against prospects for a working vaccine that could help reignite global growth.

Global markets surged last week after on vaccine optimism, with the dollar rising as traders quit their long-yen positions. But the currency market had turned risk averse towards the end of the week as global infections spread.

More than 54.01 million people have been reported to be infected by the novel coronavirus globally, with death toll exceeding 1.3 million, according to a Reuters tally.

Meanwhile, the total virus cases in the U.S. surpassed 11 million on Sunday as the pace of the pandemic quickened.

Against a basket of currencies, the greenback was roughly near where it ended last week, fetching 92.68 (=USD).

"Currency moves which were prompted by positive vaccine news have taken a pause. With no additional, positive news on the vaccine, U.S. interest rates and stocks went into correction mode at the end of the week, and dollar/yen fell," Masafumi Yamamoto, chief currency strategist at Mizuho Securities said.

"Over the weekend, uncertainty around the U.S. presidential election has declined as it became more certain that Joe Biden secured more votes, and it’s easier for traders to take risks on hopes that the next administration would soon take measures against the coronavirus," he said. The dollar could strengthen against the yen if U.S. bonds and stocks maintain their upward moment, he added.

President Donald Trump on Sunday briefly acknowledged losing the election in a morning Twitter post but then backtracked, saying he concedes "nothing" and vowing to keep up a court fight that election-law experts say is unlikely to succeed.

Meanwhile, President-elect Joe Biden focused on tackling the coronavirus pandemic and set meetings with pharmaceutical companies developing vaccines.

The yen treaded water at 104.71 per dollar , having posted its worst weekly performance since early June last week.

Australian dollar traders awaited upcoming events by the Reserve Bank of Australia, with RBA governor Philip Lowe scheduled to speak later in the day, while the central bank’s November meeting minutes are due on Tuesday.

Analysts also said the China-backed Regional Comprehensive Economic Partnership (RCEP) deal signed by 15 Asia-Pacific economies on Sunday partly helped risk appetite, as investors hoped trades that have been hit by Sino-U.S. tensions would improve.

The Aussie firmed marginally at $0.7288 in early Asian trade , and the kiwi was at $0.6871 .

Elsewhere, the British pound steadied against the dollar , changing hands at 1.3209, with the ongoing post-Brexit trade deal talks in focus.

Britain's top Brexit negotiator David Frost said on Sunday that Britain and the EU have made some progress in their post-Brexit trade deal negotiations but might not succeed in getting an agreement.

Hopes for Brexit compromise also emerged after news Dominic Cummings, the most powerful adviser to Prime Minister Boris Johnson, would leave Downing Street in mid-December.

The euro was little changed against the dollar, last sitting at 1.1839 (EUR=EBS).