Nov 29 (Reuters) -
The yuan jumped on Tuesday ahead of a COVID-19 press
briefing in China later in the day that is spurring hopes of a
potential easing in the country's strict pandemic restrictions
following an unprecedented episode of unrest.
The offshore yuan was nearly 0.9% stronger at
7.1832 per dollar after a statement from the country's National
Health Commission said its representatives and others from two
agencies involved in disease control and prevention would speak
at a COVID press briefing at 0700 GMT on Tuesday.
"People are getting quite excited about some sort of
reopening," said Alvin Tan, head of Asia FX strategy at RBC
The U.S. dollar, which rallied in the previous session
on mounting worries over China's COVID situation, pared some of
its overnight gains and moved broadly lower.
The Aussie, often used as a liquid proxy for
the yuan, rose 0.77% to $0.6704. The kiwi similarly
gained 0.71% to $0.6204.
Sterling edged 0.36% higher to $1.2001.
Rising tensions in China over the country's stringent
pandemic measures sent investors flocking to the safe-haven
dollar in the previous session, which triggered a slide of more
than 1% in the antipodean currencies and sterling overnight.
Police on Monday stopped and searched people at the sites of
weekend protests in Shanghai and Beijing, after crowds there and
in other Chinese cities demonstrated against the country's
strict zero-COVID policy.
Protests have spread to at least a dozen cities around the
world in a show of solidarity.
Elsewhere, the euro was up 0.38% at $1.03795,
after surging to a five-month peak of $1.0497 overnight.
European Central Bank President Christine Lagarde said
overnight 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.
Flash euro zone inflation figures for November are due on
Wednesday, with economists polled by Reuters expecting inflation
to come in at 10.4% year-on-year. Ahead of that, inflation
numbers from Spain and Germany are expected later on Tuesday.
"The central bank commentary that we've had this week,
including from Lagarde, has got the market on guard for the risk
that the ECB is going to raise rates by 75 basis points at its
December meeting rather than 50 basis points, which had been a
strong consensus up until the last few days," said Ray Attrill,
head of FX strategy at National Australia Bank (NAB).
The Japanese yen last traded about 0.2% higher at
138.68 per dollar.
Against a basket of currencies, the U.S. dollar index
fell 0.31% to 106.29, after rising 0.5% overnight.
The greenback remained marginally supported by hawkish
Federal Reserve speakers overnight.
St. Louis Fed President James Bullard said the Fed needed to
raise interest rates quite a bit further. Similarly, New York
Fed President John Williams said the U.S. central bank needed to
press forward with rate rises, but he did not say how fast or
how far it would need to boost short-term borrowing costs.
"The Fed rhetoric we've heard from some of the speakers in
the last 24 hours is sending a relatively hawkish message, which
is somewhat at odds with market pricing," said NAB's Attrill.
Comments from Fed Chair Jerome Powell on Wednesday will be
watched for new signals on further tightening, with key U.S.
jobs data for November due on Friday. The U.S. central bank is
widely expected to hike rates by an additional 50 basis points
when it meets on Dec. 13-14.
(Reporting by Harish Sridharan in Bengaluru; Editing by Edmund