* Cable falls more than 0.2% on narrowing lead for UK Tories
* Investors bet Trump will postpone additional China tariffs
* Euro supported after surprise uptick in German sentiment
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, Dec 11 (Reuters) - The British pound slipped early on
Wednesday after a poll showed a narrowing lead for Prime
Minister Boris Johnson's Conservative Party in an election
scheduled for later in the week, while U.S. dollar movement
looked to the Federal Reserve's policy meeting.
Investors were also focusing on whether U.S. President
Donald Trump will impose tariffs on nearly $160 billion worth of
Chinese consumer goods from Dec. 15.
Investors have generally believed the U.S. tariffs would be
at least postponed to salvage a trade deal with China.
"It is calmness before storm. Markets have long believed the
additional tariffs will be avoided," said Ayako Sera, market
economist at Sumitomo Mitsui Trust Bank.
Sterling fell to as low as $1.3107 and last stood down 0.1%
at $1.3140 GBP=D4 , giving back about a cent after hitting an 8
1/2-month high of $1.3215 on Tuesday.
It also slipped to 0.8449 pound per euro EURGBP=D4 , off
its 2 1/2-year high of 0.8394 touched earlier this week. On the
yen, it changed hands at 142.79 yen GBPJPY=R , down from
Tuesday's seven-month high around 143.39.
A closely watched model from pollsters YouGov showed
Britain's prime minister is on course to win a majority of 28 in
parliament at Thursday's election, down sharply from a forecast
of 68 last month. The pound had rallied for the past couple of months on
rising expectations that Johnson will secure an outright
majority in parliament after a Dec. 12 election to end Britain's
political paralysis over Brexit since 2016.
The dollar was traded at 108.74 yen JPY= , flat in early
Asia after a gain of 0.15% the previous day.
It drew firmness from a Wall Street Journal report of
officials from both the United States and China saying the
groundwork was being laid to push back the tariff deadline.
The White House's top economic and trade advisers are
expected to meet in coming days with Trump over that decision,
one person briefed on the situation said. "With regards to both the U.K. election and U.S.-China
talks, markets have been leaning towards optimism recently.
Therefore we need to be careful about market reactions if those
expectations do not materialise," said Kyosuke Suzuki, director
of foreign exchange at Societe Generale.
Economic uncertainty stemming from the U.S.-China trade war
has prompted the U.S. Federal Reserve to cut interest rates
three times this year. It is almost unanimously expected to
leave interest rates unchanged on Wednesday. Fed Policymakers' updated projections for the U.S. economy
and interest rates will be the main focus to assess whether they
think the rate cuts so far are enough to keep the economy
rolling for another year.
The euro stood at $1.1094 EUR= , having risen 0.23% on
Tuesday after the ZEW research institute's monthly gauge on
economic morale among German investors showed improvement far
beyond that of December.
The index rose to near a two-year high of 10.7 from -2.1 a
month earlier, exceeding even the highest forecast in a Reuters
poll of economists, aided by an unexpected rise in October
exports boosting hope for an upturn in Europe's biggest economy.
The euro's strength helped to push down the dollar index
=USD to 97.496, not far from a one-month low of 97.350 touched
on Friday.
The New Zealand dollar slipped 0.3% to $0.6526 NZD=D4 as
profit-taking overshadowed upbeat data and the promise of fiscal
stimulus by Wellington. AUD/
UK's Johnson now less certain of election victory - YouGov
Dec. 15 China tariffs threaten a long list of Christmas
favorites 'half-full' U.S. glass sturdy but still at risk for
spills as Fed meets investor morale surges on signs of resilient exports
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