FOREX-Dollar edges higher, sterling shaky before Supreme Court ruling

Published 24/09/2019, 06:52
© Reuters.  FOREX-Dollar edges higher, sterling shaky before Supreme Court ruling
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* Dollar finds broad support in Asia session

* Weak Japan, Thailand data keeps lid on optimism

* Euro nurses losses after weak manufacturing reading

* RBA Gov speech eyed

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Westbrook

SINGAPORE, Sept 24 (Reuters) - The dollar held firm on

Tuesday as the euro struggled on more signs of economic trouble

in the euro zone, while sterling wallowed near one-week lows

before a key Supreme Court ruling related to the suspension of

Britain's parliament this month.

Traders were also keeping a watchful eye on Sino-U.S. trade

talks which is set to resume next month, with

constantly-shifting expectations on the prospect of a deal

keeping markets on edge in the past month.

The dollar rose slightly against the yen JPY= to 107.59

and inched higher against a basket of currencies .DXY to

98.664. It was steady against the euro, which stayed under $1.10

mark where it had fallen on Monday following dismal readings on

German manufacturing.

Sterling was also under the gun, wallowing at $1.2429, near

a one-week low, ahead of a UK Supreme Court ruling due around

0930 GMT.

The court will rule on whether Prime Minister Boris Johnson

acted unlawfully when he suspended parliament just weeks before

Brexit, with the case's outcome potentially complicating his

plans to lead his country out of the European Union next month.

Overall, traders were cautious in light of the Brexit

uncertainty, Sino-U.S. trade talks and a slowing global economy.

Data in Asia further underscored the fragility of growth

across key economies. Japanese manufacturing activity shrank at

the quickest pace in seven months September, while Thailand also

posted a sharper-than-expected drop in production in August.

U.S. Treasury Secretary Steven Mnuchin told Fox Business

that discussions were scheduled in two weeks and that he and

U.S. Trade Representative Robert Lighthizer would meet Chinese

Vice Premier Liu He. "The Street wants these talks to make progress, so I would

expect in the run-up, if there's progress, then we'll see a

rally in emerging markets currencies," said Jeffrey Halley,

senior analyst for Asia Pacific at OANDA by phone from Jakarta.

"But I think the currency markets are in a bit of a holding

pattern...they're definitely marking time," he said.

The Australian and New Zealand dollars were steady ahead of

a speech by Reserve Bank of Australia Governor Phil Lowe at 1005

GMT, with the market expecting a dovish tone after weak jobs

data last week lifted expectations of an imminent rate cut.

Both currencies sat near three-week lows, with the Aussie

AUD=D3 buying $0.6781 and the kiwi lifting slightly to

NZD=D3 $0.6302.

"We think Lowe will provide a strong signal that the RBA is

ready to cut rates again, endorsing our view for a 25bp cut in

October," said Tapas Strickland, a director of economics and

markets at National Australia Bank in Sydney.

"Any comments on the scope for unconventional policy will

also be critical for the market."

China's yuan CNY= strengthened slightly to 7.1085.

A Bloomberg report, citing sources, saying China had granted

several domestic firms new tariff waivers for U.S. soybean

imports sent the Chinese currency higher in afternoon trade.

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