* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, May 14 (Reuters) - China's offshore yuan and the
Australian dollar found their footing again on Tuesday as
broader sentiment stabilised after U.S. President Donald Trump
said he expected Sino-U.S. trade negotiations to be successful.
Trump said earlier he would meet with Chinese President Xi
Jinping at a G20 summit next month. China had announced on
Monday it would impose higher tariffs on $60 billion of U.S.
goods following Washington's decision last week to hike its own
levies on $200 billion in Chinese imports. Though analysts said it would take time for volatility to
settle completely, risk-sensitive currencies including the
offshore yuan and the Aussie held up well following comments
from Trump late on Monday that trade talks with China are "going
to be very successful". Masafumi Yamamoto, chief currency strategist at Mizuho
Securities, said the timing of Beijing's announcement that it
would impose higher tariffs on U.S. goods had exacerbated moves
in the foreign exchange market during the previous session.
"It seems the timing was probably a surprise so the moves in
the currency market were rather large," Yamamoto said, adding
that market participants could also be over-reacting to Trump's
latest trade-related comments.
"Trump said he believes that (the trade talks) will be
successful, but success for him isn't necessarily a success for
China," Yamamoto said.
China's offshore yuan last gained about a quarter of a
percent at 6.8948 per dollar CNH=D4 .
The yuan had suffered its steepest one-day decline since
late July last year during the previous session, before hitting
its lowest versus the greenback since late December early on
Tuesday.
The Australian dollar managed to firm a tenth of a percent
to $0.6952 AUD=D4 after brushing its lowest since early
January earlier in the session.
The Aussie is often seen as a proxy for Chinese growth
because of Australia's export-reliant economy and China being
the country's main destination for its commodities.
"Volatility in the market has risen quite a lot. I think it
will take time before it will settle," said Yukio Ishizuki,
senior currency strategist at Daiwa Securities.
Ishizuki said he thought it was unlikely that sentiment
would deteriorate significantly from here ahead of Trump's
planned meeting with Xi next month.
"Quite a lot of negative news has come out. But with things
as they are, those have already been priced in by the market,"
he added.
The dollar index against a basket of six rivals held steady
at 97.320 .DXY , having ended the previous session little
changed.
Investor focus on Tuesday was also on euro zone industrial
production for March and Germany's ZEW economic sentiment index
for May, both due around 0900 GMT.
The euro rose 0.15% to $1.1238 EUR= . Sterling was a shade
higher at $1.2968.
Against the safe-haven yen, the dollar gained a quarter of a
percent to 109.60 JPY= , bouncing in line with the recovery in
sentiment after falling as low as 109.15 yen in early trade.
The greenback had touched a more than three-month low of
109.02 yen brushed during the previous session when it shed
nearly 0.6%.
Bitcoin, the world's best-known cryptocurrency, on Monday
hit $8,000 on the Bitstamp exchange BTC=BTSP for the first
time since July last year, before retreating slightly.
It was last up 1.9% on the day at $7,965.98.
(Editing by Simon Cameron-Moore)