* Dollar holds steep overnight gains
* Impeachment risk recedes, Trump stokes trade-deal optimism
* Sterling nurses losses as Brexit outlook clouds
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Tom Westbrook
SINGAPORE, Sept 26 (Reuters) - The dollar found broad
support on Thursday as investors welcomed U.S. President Donald
Trump's hints of progress toward a trade deal with China and
discounted the prospect of an impeachment probe making much
headway in the short term.
The dollar index .DXY posted its sharpest daily gain in
three months overnight and held steady in Asian trade.
The greenback also held gains on the euro and pound,
steadying near two-week highs. A euro EUR=EBS bought $1.0951
at 0105 GMT. The dollar hovered near a three-week high against
the Australian dollar, which bought $0.6749 AUD=D3 .
"It's a pretty decent move really," said Nick Twidale
co-founder of Sydney-based trade finance provider Xchainge, who
said it was driven by optimism for a U.S.-China trade deal and
markets' shifting the prospect of impeachment to the long-term.
"Markets shrug these things off very, very quickly and we
move on to the next stuff. As it moves on, it's going to be
interesting, but we have to go back to the fundamentals and
fundamentals are going to push the dollar higher over time."
Sterling GBP=D3 nursed losses at $1.2359, after dropping
more than 1% overnight as investors priced in many more months
of Brexit and election risk.
The greenback had been sold when U.S. House of
Representatives Speaker Nancy Pelosi said the Democratic-led
chamber was launching an impeachment inquiry over Trump's
handling of a call to Ukranian President Volodymyr Zelenskiy.
A summary of the call subsequently released by the
administration showed Trump pressed Zelenskiy to investigate
former Vice President Joe Biden - Trump's leading Democratic
rival - but did not show Trump threatening to withhold aid.
The House inquiry could trigger a trial in the Senate on
whether to remove Trump from office, though that is seen as
unlikely to succeed because Republicans control the Senate.
Trump also on Wednesday stoked hopes for a trade deal by
telling reporters in New York that the U.S. and China were
having "good conversations" and that an agreement "could happen
sooner than you think". "This was enough to turn the risk tide," said Michael
McCarthy, chief market strategist at brokerage CMC Markets in
Sydney of the president's comments.
It set trade-exposed risk currencies such as the New Zealand
dollar NZD=D3 and the Aussie drifting higher, though the
strong dollar capped gains to below 0.1%.
Signs of a rebound in the U.S. housing market on Wednesday,
when data showed August sales of new single-family homes rose
more than expected, further buttressed the dollar. Few
market-moving data releases are scheduled on Thursday.
Against a basket of currencies .DXY the dollar held
around 98.959, just below a two-week peak. The safe-haven yen
JPY= steadied at 107.71 per dollar.
The Chinese yuan CNH= was flat in offshore trade at 7.1278
after falling 0.3% overnight.
Editing by Jacqueline Wong)