* Dollar index edges higher
* Pound weakens on the day after Labour election manifesto
(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, Nov 21 (Reuters) - The dollar shook off early
weakness to creep higher against other major currencies on
Thursday, with investors focused on the latest developments in a
bitter 16-month long trade dispute between the United States and
China that has weighed on the world economy.
Risk sentiment seesawed on Thursday amid mixed signals on
whether Washington and Beijing can work out at least a partial
deal to end trade-related tensions between the world's two
largest economies.
Investors, who in recent weeks had grown optimistic about
the possibility of a deal, were unnerved by a hardening of the
trade war rhetoric from both sides in recent days.
The United States would raise tariffs on Chinese imports if
no deal is reached with Beijing to end a trade war, U.S.
President Donald Trump said on Tuesday.
On Thursday a report in the South China Morning Post said
the United States could delay tariffs on Chinese imports even if
a deal has not been reached by Dec. 15, when tariffs kick in on
goods including electronics and Christmas decorations.
Separately, Chinese Vice Premier Liu He, also the chief
trade negotiator, said he was "cautiously optimistic" on a phase
one deal, according to a report by Bloomberg. "The comments that are offsetting each other are not really
good for the market," said Alfonso Esparza, senior currency
analyst at OANDA in Toronto.
"Right now the dollar is very trade headline dependent," he
said.
The dollar index .DXY , which compares the dollar against
six major currencies, was up 0.07% at 97.999.
Increased trade tensions between Washington and Beijing have
generally been supportive of the dollar as investors view the
United States to be in better shape than other economies to
weather a trade war.
On Wednesday, the U.S. House of Representatives passed two
bills to back protesters in Hong Kong and send a warning to
China about human rights, with President Donald Trump expected
to sign them into law. "The bills approved by the U.S. Congress regarding Hong Kong
further antagonize the relationship, revealing the confrontation
between the U.S. and China transcends the Trump Administration,"
said Marc Chandler, chief market strategist at Bannockburn
Global Forex.
The pound struggled to break through the $1.30-mark yet
again on Thursday, as the rebound in the dollar and an election
manifesto from the opposition Labour Party that fuelled some
profit-taking on the British currency.
The pound was 0.15% lower at $1.2902.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>