* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Oct 10 (Reuters) - The dollar weakened broadly
against its rivals on Thursday as the progress of trade
negotiations between the United States and China kept markets on
edge with the prospects of a partial deal fuelling appetite for
trade-oriented currencies.
The Australian AUD=D3 and New Zealand dollars NZD=D3 led
gains against the greenback after Bloomberg reported the United
States is weighing a currency pact with China which could see a
planned tariff hike next week being suspended. With negotiations between Beijing and Washington getting
underway on Thursday, market watchers say any concessions from
China would be touted as a success from U.S. officials and that
might fuel further yen weakness and gains in the Aussie dollar.
"The (U.S.) President should be keen to achieve that, in
particular during the election campaign. ..I think the optimism
has risen repeatedly over the past few days," Ulrich Leuchtmann,
an FX strategist at Commerzbank said in a daily note.
A currency pact would pave the way for further negotiations
on core issues such as intellectual property and forced
technology transfers with reports that Beijing has offered to
increase purchases of agricultural goods further signaling a
thaw in trade tensions.
"It remains to be seen whether a partial trade deal will be
acceptable for President Trump who wants to secure a broader
agreement," MUFG strategists said.
Against a basket of its rivals .DXY , the dollar weakened
0.3% to 98.845, nearing a one-week low. It weakened as much as
0.4% versus the New Zealand and Australian dollars.
"There are many headlines flying about, some negative, and
some positive," said Stuart Oakley, global head of flow FX at
Nomura in Singapore.
"The USD/CNY fix (by China's central bank) will be key to
watch over the next 4-5 sessions. It's been pegged around 7.0730
for several weeks. A move away from that level will give us a
clear signal as to how the trade negotiations have gone."
The Chinese currency in the offshore market CNH=D3 gained
for a second day, rising 0.3% versus the greenback to 7.1145
yuan per dollar.
The pound climbed 0.3% to $1.2241, though it remained close
to a one-month low amid uncertainty over Britain's exit from the
European Union before a slew of British data.