Dollar holds gains on shaky market sentiment

The dollar held on to gains against most peers on Wednesday as doubts about a COVID-19 vaccine and lack of an agreement on a U.S. stimulus aid urged investors to a safe-haven bid.

The euro and the pound are expected to fall as Europe and Britain battle a second wave of the coronavirus, reimposing economic restrictions.

The yuan steadied against the dollar after the Chinese central bank made a move to control its strength.

Currency movements are expected to be subdued as the U.S. presidential election draws near. However, analysts say the market sentiment is leaning towards safer assets and will most likely support the dollar in the coming days.

Against the euro, the dollar traded at $1.1744, holding on to a 0.6% gain from the last session. The pound stood at $1.2932, weighed by little progress in the EU-Britain post-Brexit talks and the prospect of negative interest rates from the Bank of England.

In onshore trade, the yuan stood at 6.7422 on the dollar. The Chinese currency posted its biggest fail in seven months on Monday.

The Aussie was little changed in Asian trade but is expected to fall further amid a dispute with Beijing over coal imports. The kiwi gained against the dollar on upbeat economic data.