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FOREX-Euro edges higher as vaccine and recovery hopes lift investor spirits

* Euro gain vs dollar but rise is limited

* Vaccine hopes trump rising cases for now

* Asian economic data boosts sentiment, China’s yuan

* Graphic: World FX rates in 2020 (Adds new quote, chart, latest prices)

LONDON, Nov 16 (Reuters) - The euro inched higher on Monday, as investors began the week in a relatively upbeat mood after strong economic data from Asia and on hopes for a successful vaccine against COVID-19.

Despite fears of a resurgence of global cases of COVID-19, investors remain hopeful a working vaccine could rescue the global economy, helping to fuel a rally in stock markets and a rebound in riskier currencies.

The euro rose 0.3% to a one-week high of $1.1869 and was last up 0.1% at $1.1843. The dollar, measured against a basket of currencies, was little changed at 92.657.

Commerzbank analysts said investor confidence that the euro region was better prepared to launch more fiscal stimulus than a divided U.S. Congress was helping.

“In particular as the positive news about vaccine developers are providing a glimmer of hope at the end of the corona tunnel the FX market is likely to prefer an active fiscal reaction over inactivity,” said Commerzbank strategist Ulrich Leuchtmann.

“If the end of the pandemic is foreseeable the tactic of pushing the European economies over lockdown with the help of fiscal policies makes sense again to FX traders.”

In a sign of the positive mood, currencies sensitive to global sentiment such as the Norwegian crown and the Australian dollar notched up solid gains.

The Aussie, up 0.5% at $0.7309, held firm after the Reserve Bank of Australia governor said the bank would consider negative interest rates only if all major central banks took their rates below zero, an “incredibly unlikely” scenario.

Adding to investor optimism was data on Monday showing signs of economic recovery in China and Japan, the world’s second and third largest economies, as well as 15 Asia-Pacific economies on Sunday signing the China-backed Regional Comprehensive Economic Partnership deal.

The Chinese yuan firmed 0.4% in offshore markets to a one-week high of 6.5661 yuan per dollar.

Trade talks between Britain and the European Union resumed, although initial confidence that the two sides could make progress dissipated and the gains in the pound were short-lived.

Sterling rallied to as high as $1.3242 before settling at $1.3195, down slightly. Against the euro the pound slipped marginally to 89.70 pence.

Ireland’s foreign minister said Britain and the EU had a week to 10 days to find a way to unlock the talks.

ING analysts said even with an extension to the talks the time for ratification was “dangerously shrinking”, with Britain’s Brexit transition period concluding on Dec. 31.

Additional reporting by Eimi Yamamitsu in Tokyo; Editing by Kirsten Donovan and Alex Richardson