By Suzanne Barlyn
Dec 15 (Reuters) - The dollar hovered close to two-year lows on Tuesday as progress toward a massive U.S. government spending bill and COVID-19 relief measures boosted spirits while investors awaited interest rate cues from the Federal Reserve's final meeting of the year.
The dollar index, which measures the greenback against a basket of currencies, was last at 90.5750 =USD , after sinking as low as 90.419 on Monday, a level unseen since April 2018.
Hopes that U.S. lawmakers can agree $1.4 trillion in spending and more clarity about COVID-19 vaccine distribution have whetted investors' risk appetite, driving them away from safe-haven currencies. sentiments spurred Wall Street's main indexes higher on Tuesday. another step toward broader vaccine distribution, Moderna Inc's MRNA.O COVID-19 vaccine appeared set for regulatory authorization this week after U.S. Food and Drug Administration staff endorsed it as safe and effective in documents released Tuesday. have equity market moves based on vaccine headlines and prospects for fiscal stimulus, but if you look at the bigger picture, nothing's really changed," said Ronald Simpson, managing director, global currency analysis at Action Economics.
The dollar, which barely reacted to data published on Tuesday for U.S. industrial production and New York State manufacturing will likely remain under pressure into 2021 as vaccines roll out and economies re-open, Simpson said.
The Fed, which begins a two-day meeting later on Tuesday, is expected to keep its key overnight interest rate pinned near zero and to signal it will stay there for years to come. Such moves would further boost investors' confidence for risk-taking, analysts said.
Many analysts also expect new guidance on how long the Fed will keep up its massive bond-buying program.
Broad-based selling of the U.S. dollar drove the euro to hover near a 2-1/2 year peak on Tuesday. The single currency has rocketed 4% since early November to its highest level since April 2018, in part because of broad-based selling of the U.S. dollar and as investors bet a vast European recovery fund package will lift the regions' economies.
The euro was last at $1.2152, up 0.07%. EUR=EBS .
Elsewhere, sterling continued to maintain its Monday surge, triggered by news Britain and the European Union would keep on talking to try and seal a Brexit trade deal. The pound was last at 1.3377 GBP=D3 , up 0.38%.
The Australian dollar was up 0.11% to $0.7540 AUD=D3 after touching the highest since June 2018 at $0.7578 on Monday.
Bitcoin was last at $19,396.45, up 0.81%.
"The big picture is that 2021 looks increasingly promising for global growth, and while the U.S. will certainly be a part of that, the global reflation trade is going to support the risk-sensitive currencies like the Australian dollar," said Westpac currency analyst Sean Callow.
"The dollar is likely to be in the group of laggards, along with the likes of the yen."
========================================================
Currency bid prices at 10:27AM (1527 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Dollar index
=USD
90.5750
90.6960
-0.13%
+0.00%
+90.8240
+90.5340 Euro/Dollar
EUR=EBS
$1.2152
$1.2143
+0.07%
+8.39%
+1.2166
+1.2121 Dollar/Yen
JPY=D3
103.7150
104.0450
-0.23%
-4.43%
+104.1450 +103.7500 Euro/Yen
EURJPY=
126.02
126.33
-0.25%
+3.34%
+126.5800 +125.9600 Dollar/Swiss
0.8869
0.8869
+0.02%
-8.33%
+0.8880
+0.8851 Sterling/Dollar GBP=D3
1.3377
1.3327
+0.38%
+0.87%
+1.3396
+1.3280 Dollar/Canadian CAD=D3
1.2738
1.2767
-0.22%
-1.94%
+1.2771
+1.2733 Aussie/Dollar
AUD=D3
0.7540
0.7532
+0.11%
+7.47%
+0.7546
+0.7508 Euro/Swiss
EURCHF=
1.0775
1.0769
+0.06%
-0.71%
+1.0785
+1.0759 Euro/Sterling
EURGBP=
0.9083
0.9107
-0.26%
+7.44%
+0.9149
+0.9062 NZ
NZD=D3
0.7075
0.7082
-0.07%
+5.17%
+0.7091
+0.7060 Dollar/Dollar
Dollar/Norway
NOK=D3
8.7320
8.7320
+0.00%
-0.46%
+8.7530
+8.7165 Euro/Norway
EURNOK=
10.6118
10.6310
-0.18%
+7.87%
+10.6375
+10.5939 Dollar/Sweden
8.3834
8.4000
-0.18%
-10.31%
+8.4202
+8.3772 Euro/Sweden
EURSEK=
10.1878
10.2058
-0.18%
-2.69%
+10.2215
+10.1850
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euro during the coronavirus crisis
https://tmsnrt.rs/3aaPsK2
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>