* Euro climbs on vaccine optimism
* Sterling gains on Brexit deal hopes
* Dollar weakens to more than 1-week low
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Ritvik Carvalho
LONDON, Nov 17 (Reuters) - The euro climbed against the dollar on Tuesday, helped by optimism over another coronavirus vaccine, while the Chinese yuan hit its highest against the U.S. currency since June 2018.
Europe's shared currency, however, fell against a broadly stronger pound, which gained on media reports that Britain could reach a post-Brexit trade agreement with the European Union by early next week. Moderna MRNA.O became the second U.S. pharmaceutical company in a week to report positive results from trials of a COVID-19 vaccine, considered necessary to eradicate the pandemic.
Last week, encouraging progress in vaccine testing helped the dollar rise against the safe-harbour yen and the Swiss franc.
Some of those moves reversed on Tuesday, with the yen gaining back ground against the dollar.
"Euro/dollar remains well supported, buoyed by global optimism," said Chris Turner, global head of markets at ING in a note to clients.
"Given the challenges Europe faces – in the middle of a second lockdown – the euro certainly won't lead the rally against the dollar, but we think the dollar decline is broad enough to drag euro/dollar back to $1.1920."
The euro last traded 0.2% higher to the dollar at $1.18715.
Sterling last traded 0.14% higher at $1.3218 and also edged up to 89.78 pence per euro EURGBP=D3 .
The greenback lost 0.3% to trade at 104.30 yen JPY=D3 .
Investors in the dollar were looking ahead to the release of U.S. retail sales and industrial production later on Tuesday to gauge the health of the economic recovery.
However, policymakers' response to a record number of coronavirus cases, hospitalisations and deaths in several U.S. states is likely to remain of greater concern. dollar index =USD against a basket of major currencies stood at 92.431, its lowest in over a week.
New infections are also increasing in Britain, Europe and Japan, further clouding the economic outlook.
The Australian dollar AUD=D3 held onto overnight gains against the greenback, while the New Zealand dollar NZD=D3 fell back after hitting its strongest in more than a year as investors scaled back bets for additional interest rate cuts.
Minutes from the Reserve Bank of Australia's most recent policy meeting showed the central bank was ready to provide yet more policy stimulus if needed after cutting rates to record lows. onshore yuan CNY=CFXS hit its highest since June 2018 against the dollar at 6.5461 as positive economic data continues to support the Chinese currency.