FOREX-Dollar gains vs yen, Swiss franc on continued trade deal optimism

Published 07/11/2019, 16:43
Updated 07/11/2019, 16:45
© Reuters.  FOREX-Dollar gains vs yen, Swiss franc on continued trade deal optimism
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* Mild risk-on sentiment seen across major currencies

* China spokesman boosts trade deal hopes

* Dollar gains versus yen; safe-haven currencies suffer

* Sterling falls vs dollar on BoE decision

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

(Recasts, adds new comment, sterling moves, FX table, updates prices, changes byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Nov 7 (Reuters) - The dollar gained against the safe-haven yen and Swiss franc on Thursday,

bolstered by comments from a Chinese commerce ministry official that suggested the world's two largest

economies are inching closer to a trade deal.

The Chinese commerce ministry said on Thursday Beijing and Washington have agreed to cancel in phases

the tariffs imposed during their months-long trade war, but specified no timetable.

The proportion of tariffs canceled for both sides to reach a "phase one" deal must be the same, but

the number to be canceled can be negotiated, he said. The dollar rose to near three-month highs versus the yen after the news, retracing its 0.3% losses

earlier in the session, as investors interpreted the comments as positive news. It was last up 0.2% at

109.19 yen.

The dollar also gained against another safe haven, the Swiss franc, trading up 0.2% at 0.9946 franc

CHF= .

Investors tend to sell the yen and Swiss franc in times of improved risk sentiment.

Some analysts, though, cautioned about reading too much into China's comments.

"It's a very mild risk-on day. The Chinese news has already been factored in and markets are very

tentative pricing in headlines that don't necessarily add much," said Simon Harvey, FX market strategist,

at Monex Europe in London.

"We have already filtered through the Phase One deal. We have already filtered through the

de-escalation of tariffs. You see these headlines, but nothing really has been put in the diary," he

added.

Hopes for a trade deal had been waning after a senior official of the Trump administration told

Reuters on Wednesday a meeting to sign the deal could be delayed until December and that a venue had not

yet been agreed. The Australian and New Zealand dollars - proxies for risk which had been weakening due to uncertainty

surrounding the possible trade deal - also gained on the comments with the Aussie up 0.3% versus the

dollar at US$0.6902. AUD=D3 .

Against a basket of currencies, the dollar was slightly higher at 98.075 .DXY .

The euro was down at 0.2% against the dollar at $1.1051 EUR= , having hit three-week lows earlier in

the session.

The pound, meanwhile, fell to two-week lows against the dollar and was last down 0.3% at $1.2820

GBP= after two Bank of England officials unexpectedly voted to lower interest rates on Thursday to ward

off an economic slowdown.

The BoE did keep the bank rate steady at 0.75%, but other bank officials including Governor Mark

Carney said they would consider a cut if global and Brexit headwinds do not ease. "The BoE's "mixed messaging suggests that the bar remains quite high for sterling to register a large

and sustained move on the back of today's decision," TD Securities said in a research note.

But it added that sterling is likely to remain rangebound against the dollar over the next few weeks,

with investors focused on the UK general election on Dec. 12.

========================================================

Currency bid prices at 10:35AM (1535 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1047 $1.1065 -0.16% -3.68% +1.1091 +1.1049

Dollar/Yen JPY= 109.2000 108.9600 +0.22% -0.96% +109.2200 +108.6600

Euro/Yen EURJPY= 120.65 120.58 +0.06% -4.41% +121.1100 +120.1400

Dollar/Swiss CHF= 0.9949 0.9926 +0.23% +1.38% +0.9951 +0.9912

Sterling/Dollar GBP= 1.2816 1.2850 -0.26% +0.46% +1.2877 +1.2795

Dollar/Canadian CAD= 1.3179 1.3180 -0.01% -3.36% +1.3199 +1.3158

Australian/Doll AUD= 0.6896 0.6882 +0.20% -2.17% +0.6911 +0.6863

Euro/Swiss EURCHF= 1.0992 1.0985 +0.06% -2.33% +1.1008 +1.0976

Euro/Sterling EURGBP= 0.8618 0.8609 +0.10% -4.07% +0.8658 +0.8603

NZ NZD= 0.6355 0.6367 -0.19% -5.30% +0.6386 +0.6348

Dollar/Dollar

Dollar/Norway NOK= 9.1054 9.1704 -0.71% +5.41% +9.1866 +9.0802

Euro/Norway EURNOK= 10.0602 10.1481 -0.87% +1.56% +10.1580 +10.0590

Dollar/Sweden SEK= 9.6092 9.6252 -0.30% +7.20% +9.6413 +9.5788

Euro/Sweden EURSEK= 10.6180 10.6501 -0.30% +3.45% +10.6610 +10.6107

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