* Dollar index firms on doubts over Sino-U.S. trade talks
* Chinese yuan down 0.3%, euro undermined by more weak data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Sujata Rao
LONDON, Oct 7 (Reuters) - The dollar firmed on Monday,
breaking a four-day losing streak, as fresh concerns over the
trade war between the United States and China kept risk appetite
subdued and trade-oriented currencies such as the Australian
dollar under pressure.
A Bloomberg report that Chinese officials were reluctant to
agree to U.S. President Donald Trump's broad trade deal cast a
pall over investors, after weak U.S. economic data last week
raised concerns about the economic outlook. "The trade news has boosted safe-haven demand for the dollar
and hit the high-beta currencies such as the Aussie and the
Swedish crown," said Kamal Sharma, a London-based director of
G10 FX strategy at Bank of America Merrill Lynch.
The dollar, which tends to benefit when trade tensions flare
up, rose further off one-month lows hit last week when a string
of poor data suggested the conflict was inflicting a bigger toll
on the world's biggest economy.
The greenback firmed 0.15% against a basket of currencies to
98.90, after weakening around 1% last week. It rose by more than
0.5% versus the Swedish crown and the Norwegian currency NOK= .
"Markets have a bit of a risk-off tone today, and risk-off
is generally dollar positive," Stephen Gallo, head of FX at BMO
Capital Markets, said, though he noted the dollar faced
short-term headwinds.
Hedge funds have added to their massive long dollar
positions, which rose in the latest week to a nine-week high,
according to Reuters calculations and Commodity Futures Trading
Commission data released on Friday. euro remains out of favour, the data showed, with
bearish bets on the currency climbing sharply.
The latest data appeared to justify the pessimism, with
German industrial orders falling more than expected in August on
weaker domestic demand - clear evidence that a manufacturing
slump is pushing Europe's largest economy into recession.
The euro traded as low as $1.0964 EUR=EBS but held off
2-1/2-year lows of $1.0879 hit last Tuesday.
The Chinese yuan CNH= fell 0.3% to 7.13 per dollar in
offshore trade. There was no onshore trading as China is still
on a break for its national day. Gallo said the clouds over the
dollar offered some support to the yuan.
"If things break down this week, I don't think you will see
dollar/yuan above 7.20 on that headline," he added.
Other trade-exposed currencies such as the Australian dollar
AUD=D3 and the Korean won KRW= also fell, with the former
losing a quarter percent and the won down 0.4%.
Sterling slipped 0.2% to around $1.23 GBP=D3 , with only a
few weeks until the UK's scheduled exit from the European Union
on Oct. 31.
Speculators raise dollar positions https://tmsnrt.rs/35bKsA3
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