Aussie jumps on China reopening hopes



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Graphic: World FX rates Link

By Karen Brettell

NEW YORK, Nov 29 (Reuters) - The Aussie bounced back on Tuesday as sentiment improved on hopes that China would reopen from COVID shutdowns that have increased fears about global growth, while the U.S. dollar dipped slightly against the euro and yen.

China will speed up COVID-19 vaccinations for elderly people, health officials said on Tuesday, aiming to overcome a key stumbling block in efforts to ease unpopular "zero-COVID" curbs.

“The reopening theme is coming back in China, so that’s supporting local equity markets and risk assets more broadly,” said Vassili Serebriakov, FX strategist at UBS in New York.

Risk appetite had worsened on Monday after protestors and police clashed over the stringent COVID restrictions.

Chinese authorities have begun inquiries into some of the people who gathered at weekend protests as police remained out in numbers on the city's streets.

The risk sensitive Aussie dollar AUD=D3 , which is strongly tied to Chinese growth, was the best performing major currency, rising 0.93% to $0.6715.

Federal Reserve interest rate policy is also in focus with Fed Chair Jerome Powell due to speak on Wednesday and jobs data for November due on Friday.

The dollar index =USD has fallen to 106.65 from a 20-year high of 114.78 on Sept. 28 as investors look toward the U.S. central bank reaching a peak rate early next year with inflation pressures expected to subside.

“The broader picture here has been we had a sizable reversal in the dollar since the October CPI report, so that’s probably a symptom of Fed tightening fading as a force of dollar support as markets increasingly look for peak Fed policy early next year,” said Serebriakov.

The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14. Traders are pricing for the fed funds rate to peak at 4.99% in June, before falling back to 4.61% by Dec. 2023. FEDWATCH

Euro zone inflation data due on Wednesday is also in focus after data showed inflation in Spain and Germany came in below expectations.

European Central Bank President Christine Lagarde said on Monday that euro zone inflation had not peaked and it risked turning out even higher than currently expected, hinting at a series of interest rate hikes ahead.

The euro EUR=EBS rose 0.04% against the U.S. currency to $1.0344. The greenback dipped 0.13% to 138.72 Japanese yen JPY=EBS .

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Currency bid prices at 9:42AM (1442 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

106.6500

106.6200

+0.04%

11.485%

+106.8100 +106.0500 Euro/Dollar

EUR=EBS

$1.0344

$1.0340

+0.04%

-9.01%

+$1.0395

+$1.0325 Dollar/Yen

JPY=EBS

138.7200

138.9050

-0.13%

+20.51%

+139.3450 +137.8900 Euro/Yen

EURJPY=

143.49

143.64

-0.10%

+10.11%

+144.0200 +143.0400 Dollar/Swiss

CHF=EBS

0.9529

0.9489

+0.44%

+4.48%

+0.9544

+0.9461 Sterling/Dollar GBP=D3

$1.1968

$1.1958

+0.13%

-11.47%

+$1.2063

+$1.1955 Dollar/Canadian CAD=D3

1.3544

1.3496

+0.36%

+7.12%

+1.3557

+1.3409 Aussie/Dollar

AUD=D3

$0.6715

$0.6653

+0.93%

-7.62%

+$0.6749

+$0.6641 Euro/Swiss

EURCHF=

0.9858

0.9811

+0.48%

-4.93%

+0.9871

+0.9814 Euro/Sterling

EURGBP=

0.8640

0.8647

-0.08%

+2.85%

+0.8652

+0.8608 NZ

NZD=D3

$0.6213

$0.6161

+0.91%

-9.18%

+$0.6253

+$0.6162 Dollar/Dollar

Dollar/Norway

NOK=D3

9.9800

10.0315

-0.80%

+12.96%

+10.0215

+9.9395 Euro/Norway

EURNOK=

10.3185

10.3508

-0.31%

+3.05%

+10.3730

+10.3045 Dollar/Sweden

SEK=

10.5391

10.5539

-0.04%

+16.87%

+10.5637

+10.4797 Euro/Sweden

EURSEK=

10.9013

10.9054

-0.04%

+6.52%

+10.9215

+10.8826
Additional reporting by Joice Alves in London

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