Risk-sensitive sterling and euro rose on Tuesday against the weakening safe haven U.S. dollar amid hopes of a potential easing in China's strict pandemic restrictions following an unprecedented episode of unrest in the country.
News that China will speed up COVID-19 vaccinations for elderly people aiming to overcome a key stumbling block in efforts to ease unpopular "zero-COVID" curbs supported the yuan, while weakening the U.S. dollar against major currencies. "People are getting quite excited about some sort of reopening," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
The U.S. dollar , which rallied in the previous session on mounting worries over China's COVID-19 situation, fell 0.4% to 106.19.
The offshore yuan surged 1% to 7.1777 a dollar. The onshore yuan was up 1% at 7.1732 per dollar.
Risk-sensitive sterling strengthened 0.5% to $1.2017, while the euro was up 0.34% at $1.0375, not far from a five-month peak of $1.0497 hit on Monday.
The Aussie , often used as a liquid proxy for the yuan, rose 1.35% to $0.6743. The kiwi similarly gained 1.4% to $0.6248.
The Japanese yen last traded about 0.7% higher at 137.98 per dollar.
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.
