* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Hopes for U.S.-China trade deal wax and wane
* Traders looking for signs of trade deal this month
* Dollar/yen locked in narrow rage
By Stanley White
TOKYO, Nov 19 (Reuters) - The dollar fell against the yen on
Tuesday as receding hopes for a preliminary trade deal between
the United States and China hurt demand for the greenback.
The yuan touched a two-week low versus the greenback amid
doubts about the U.S.-China trade war.
The Australian dollar also fell after minutes from a Reserve
Bank of Australia policy meeting showed central bankers
considered cutting rates this month. There have been high expectations that the United States and
China would sign a so-called "phase one" deal this month to
scale back their 16-month long trade war.
But the dollar took a hit on Monday after CNBC reported that
China is pessimistic about agreeing to a deal, which suggests a
resolution to perhaps the biggest risk to the global economy
remains elusive. "The dollar tried to break above 109 yen, but it couldn't
because of worries about the trade deal," said Junichi Ishikawa,
senior foreign exchange strategist at IG Securities in Tokyo.
"The Treasury market is starting to reflect similar concerns
about the lack of a trade deal," Ishikawa added. "This will keep
dollar/yen in a narrow range."
The dollar JPY=EBS fell 0.11% to 108.55 yen, following a
0.09% decline on Monday.
The dollar was quoted at $1.1067 per euro EUR=EBS on
Tuesday in Asia after falling to the lowest in almost two weeks.
Against a basket of six major currencies, the dollar index
.DXY stood at 97.856, close to a two-week low.
The yield on 10-year Treasury notes US10YT=RR fell
slightly to 1.8049% in Asia, also approaching a two-week low as
uncertainty boosted demand for the safety of government debt.
Citing a government source, CNBC reported on Monday that
Beijing was pessimistic about a trade deal with the United
States, troubled by Trump's comments that there was no agreement
on phasing out tariffs. In the onshore market, the yuan CNY=CFXS fell to a
two-week low of 7.0295 per dollar.
Washington and Beijing have imposed tariffs on each other's
goods in a bitter dispute over Chinese trade practices that the
U.S. government says are unfair.
The tariffs have slowed global trade and raised the risk of
recession for some economies. Many economists say the drag on
global growth will remain as long as tariffs are in place.
Currency traders were also wary of the dollar after Trump
met U.S. Federal Reserve Chairman Jerome Powell on Monday amid
the U.S. president's repeated criticism that the Fed has not
lowered interest rates enough. "Everything was discussed including interest rates, negative
interest, low inflation, easing, Dollar strength & its effect on
manufacturing, trade with China, E.U. & others, etc.," Trump
tweeted soon after the meeting, calling the session "good &
cordial."
In a statement, the Fed said Powell's expectations for
future policy were not discussed, but Trump has for more than a
year said the Fed was undermining his economic policies by
keeping interest rates too high.
Elsewhere in the currency market, the Australian dollar
AUD=D3 fell 0.25% to $0.6789 and declined 0.36% to 73.73 yen
AUDJPY= .
Australia's central bank "agreed a case could be made" for
another cut in the 0.75% cash rate at its November meeting given
unwelcome weakness in wages growth and inflation, minutes
published on Tuesday showed.
The RBA decided to hold steady, in part because of worries
that further easing would harm savers and confidence.
The central bank has already cut rates three times since
June to an historic low.
The Aussie took a hit last week after data showed Australian
employment suffered its sharpest fall in three years in October,
underlining the need for stimulus.