Asian shares have retreated as investors cashed in on a recent rally, while the euro flirted with highs not seen in more than 2 and a half years as hopes of a gradual global economic recovery supported demand for riskier currencies.

Australian shares lost 0.79 per cent while Japan’s Nikkei share average lost 0.03 per cent after jumping to a 30-year high on Tuesday.

Hong Kong’s Hang Seng index futures were up 0.11 per cent, however, while E-Mini futures for the S&P 500 were little changed.

Shares on Wall Street had pulled back from record highs overnight as uncertainty about whether the US Senate would authorise additional stimulus cheques gave investors a reason to take profits.

The US Senate’s vote on the additional cheques appeared to be delayed by early Wednesday morning Asia time, while news that the United States has detected its first-known case of a highly infectious coronavirus variant could give investors more reason to cash in gains.

But in a sign that markets are not avoiding risky assets across the board, the US dollar struggled as investors favoured riskier currencies.

The euro was steady at $1.2255, after climbing overnight to a high of $1.2275, a level last seen in April 2018. Traders said the common currency appeared well-supported at $1.2200 and $1.2165.

“The start of COVID-19 immunisation campaigns in several countries as well as additional US fiscal support reduce downside risk to the global economy and bode well for general financial market sentiment,” analysts at Commonwealth Bank of Australia said in a note.

The Australian dollar was steady at $0.7609, within sight of a 2-1/2-year high of $0.7639, while sterling traded sideways at $1.3500. The Japanese yen was little changed at 103.55, with some traders predicting it will be pinned between the 103.00-104.00 range for now.

Investors are betting that the dollar is entering a downtrend in the foreseeable future as a recovery in the global economy next year leads them to shun so-called “safe-haven” assets such as the greenback.

The US dollar was listless against a basket of major currencies, losing 0.29 per cent to stand at 89.982, within spitting distance from a 2-1/2-year low of 89.72.

A sluggish dollar supported gold, with bullion prices steady at $1,877.11 an ounce.

Oil prices rebounded overnight as investors hoped that an expanded US pandemic aid stimulus would spur fuel demand and stoke economic growth.

US West Texas Intermediate crude futures were up 0.23 per cent at $48.11 a barrel.

Treasuries were little changed after trading sideways overnight in thin trade amid the year-end holidays. US two-year yields were steady at 0.1289 per cent and benchmark 10-year yields stood at 0.9347 per cent.