TOKYO, Nov 24 (Reuters) - Risk-sensitive currencies gained on Tuesday as investors breathed easier after U.S. President Donald Trump accepted the start of a transition to a Biden administration, that is expected to include former Federal Reserve Chair Janet Yellen as Treasury secretary.

Trump gave the head of the General Services Administration the go-ahead to proceed with a transition to a government led by President-elect Joe Biden despite plans to continue with legal challenges.

Democratic allies to the Biden campaign said Yellen is expected to be nominated to become Treasury Secretary, heartening investors as she has called for increased government spending to lift the economy out of a coronavirus induced recession.

"One thing is for sure and that is there is unlikely to be as many Fed-Treasury spats," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

"Those Fed lending facilities for municipal funding, the corporate bond market and Main Street will be coming back quickly after the December 31 expiration date."

Last week U.S. Treasury Secretary Steven Mnuchin let some of the Fed's lending programmes expire at the end of this year, opening a feud with the Fed, which said those emergency facilities are important to support the economy.

The Australian dollar ticked up 0.4% to $0.7313 while emerging market currencies such as the Mexican peso

and the South African rand also gained about 0.4%

The New Zealand dollar soared as much as 0.9% to scale a two-year high of $0.6985 also after the country's government sought advice from the Reserve Bank of New Zealand (RBNZ) on how it could help stabilise property prices, prompting investors to unwind wagers of more monetary easing.

The dollar held firmer against the safe-haven yen and the euro, after IHS Markit's U.S. manufacturing and services sector purchasing managers' indexes (PMI) both topped even the most optimistic forecasts in a Reuters poll.

While the U.S. PMI is usually not a big market mover, the reading made a sharp contrast with less inspiring figures from Europe published several hours earlier, helping the dollar to gain against the euro, traders said.

The safe-haven yen traded at 104.49 per dollar , having slipped about 0.6% overnight while the euro slipped to $1.1844 on Monday.

That helped to lift the dollar index to 92.463, off Monday's low of 92.013, its lowest since Sept. 1.

"The apparent strength of the U.S. data was favourable for the dollar," said Kyosuke Suzuki, director of forex at Societe Generale.

But Suzuki added that, despite its latest gains, the dollar's downtrend is likely to continue given the U.S. is running huge fiscal and trade deficits.

The U.S. currency's safe-haven appeal was also dented after AstraZeneca further lifted investors' appetite for risk by saying its COVID-19 vaccine could be about 90% effective and it would prepare to submit data to authorities around the world that have a framework for conditional or early approval.

The British pound held firm near a 12-week high against the dollar and six-month high versus the euro, propped up by bets Britain and the European Union would clinch a Brexit trade deal.

London and Brussels this week continue their negotiations to agree a deal on their future trading relationship, though time is now running very short as Britain's post-Brexit transition period ends in fewer than six weeks.

The pound stood at $1.3330 , having hit a high of $1.3396 on Monday. Against the euro, it traded at 0.8887 to the euro , near its six-month high touched about two weeks ago.

(Reporting by Hideyuki Sano Editing by Shri Navaratnam & Simon Cameron-Moore)

((hideyuki.sano@thomsonreuters.com; +81 3 4520 1195;))