* Trump says a deal with China could happen soon
* Dollar near its recent highs, enjoy safe haven demand
* New Zealand dollar rises on central bank comments
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Tommy Wilkes
LONDON, Sept 26 (Reuters) - The dollar edged lower but held
close to its recent highs on Thursday as investors struggled to
make sense of U.S. President Donald Trump's mixed signals on a
trade deal with China.
Foreign exchange markets were quiet at the European open,
with currency pairs little moved but the dollar's resilience
this week was a sign of investor nervousness about the global
outlook.
"We need new direction," said Neil Mellor, a markets analyst
at BNY Mellon, citing a pushback from central banks to markets
expecting more monetary stimulus and confusion over whether the
United States can strike a deal with China for the current
range-bound moves in FX markets.
He said that he favoured the dollar as a safe haven currency
in the short-term because of a difficult outlook for the global
economy and trade negotiations, especially as central banks
signal they "are not prepared to keep on shovelling out
liquidity into the market".
"There is a greater downside risk to risk assets," he said.
The dollar index, which measures the greenback against a
basket of currencies, was last down 0.1% at 98.985 .DXY but
was only a whisker away from a two-week high and the two-year
peak of 99.37 hit earlier this month.
Trump stoked hopes for a trade deal by telling reporters in
New York that the United States and China were having "good
conversations" and that an agreement "could happen sooner than
you think". "It's the Trump pump, and it works," said Matt Simpson,
senior market analyst at Gain Capital in Singapore.
"But there's not really any major moves either, it's a
slight boost to risk," he said, noting traders were also trying
to assess the likely direction of a Trump impeachment probe
opened by the Democrats on Wednesday.
That initially helped the Australian dollar claw higher,
while the New Zealand dollar NZD=D3 kicked ahead further after
New Zealand's central bank governor said it was unlikely he
would need to use unconventional monetary policy. But by 0730 GMT, the Aussie was up only slightly on the day
at $0.6753 AUD=D3 , while the yuan was up 0.1% at 7.1241 per
dollar in the offshore market CNH=EBS .
The New Zealand dollar was last up 0.4% at $0.6297.
The euro rose 0.1% to $1.0947 EUR=EBS .
The Japanese yen, perceived as a safe haven currency, rose
0.1% to 107.68 yen per dollar JPY=EBS .
Sterling steadied at $1.2354 GBP=D3 after plunging more
than 1% on Wednesday as traders fretted about the deepening
confrontation in the British parliament over Brexit.