* China's move on rare earths stokes anxiety over trade
* Major currencies hold steady even as global yields fall
* Risk aversion hits emerging market, commodity currencies
* Canada dollar hits 5-month low after BOC holds rates
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, changes byline and dateline, previous
LONDON)
By Richard Leong
NEW YORK, May 29 (Reuters) - The dollar stayed firm on
Wednesday, as investors focused on socking their money into
bonds and gold - and to a lesser extent the yen and Swiss franc
- with no end in sight in the trade tension between China and
the United States.
Investor jitters intensified after the People's Daily
newspaper, owned by China's ruling Communist Party, said Beijing
was ready to use rare earths for leverage in its trade dispute
with the United States. "Don't say we didn't warn you," it added
in a strongly worded commentary. The wave of risk aversion sent sovereign bond yields
tumbling across the world. Benchmark U.S. Treasury yields
US10YT=RR fell to their lowest levels since September 2017
while New Zealand bond yields tumbled to a record
low. Fears about a trade war between the world's two biggest
economies spurred selling in emerging market currencies such as
the South African rand ZAR= and Brazilian real BRL= and
commodity-sensitive currencies including the Australian and New
Zealand dollars AUD= NZD= .
"Most of the risk aversion that's coursing through markets
is being felt by the Aussie, Kiwi and emerging markets," said
Joe Manimbo, senior market analyst at Western Union Business
Solutions in Washington. "Big majors (are) little changed as key
supports hold for now."
At 11:17 a.m. (1517 GMT), an index that tracks the greenback
against the euro, yen, sterling and three other currencies
.DXY was 0.24% higher at 98.187, holding below a two-year high
of 97.908 reached last week.
The Chinese yuan CNY=CFXS softened to 6.9130 per dollar,
not far from 5-1/2 month lows. Benchmark 10-year Treasury yields US10YT=RR fell to 2.219%
earlier Wednesday, the lowest since September 2017, while yields
on 10-year New Zealand government debt NZ10YT=RR touched
1.730%, the lowest level since at least 1985.
Gold prices XAU= rose on the day's safe-haven move,
gaining 0.2% to about $1,282 an ounce. The greenback was little changed against the yen JPY= and
the Swiss franc CHF= at 109.36 yen and 1.0078 franc per
dollar, respectively.
The euro was a tad weaker against the Japanese and Swiss
currencies at 121.695 yen and 1.1217 france, respectively.
Major central banks have not signaled an imminent policy
easing to counter business slowdown stemming from the Sino-U.S.
trade conflict.
The Bank of Canada on Wednesday left interest rates
unchanged at 1.75% on expectations growth has picked up in the
second quarter following a deceleration in the previous quarter.
It did acknowledge increasing risks from global trade tension.
The Canadian dollar CAD=D4 reached a five-month low of
C$1.3547 after the BOC rate decision.
Still, traders reckoned policy-makers would relent. Interest
rate futures implied they believe the U.S. Federal Reserve would
lower key lending rates by year-end.
========================================================
Currency bid prices at 11:18AM (1518 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1126 $1.1160 -0.30% -2.97% +1.1173 +1.1128
Dollar/Yen JPY= 109.3700 109.3600 +0.01% -0.80% +109.4600 +109.1600
Euro/Yen EURJPY= 121.71 122.04 -0.27% -3.57% +122.2000 +121.7000
Dollar/Swiss CHF= 1.0081 1.0075 +0.06% +2.72% +1.0082 +1.0050
Sterling/Dollar GBP= 1.2621 1.2652 -0.25% -1.06% +1.2671 +1.2619
Dollar/Canadian CAD= 1.3525 1.3490 +0.26% -0.82% +1.3546 +1.3481
Australian/Doll AUD= 0.6909 0.6922 -0.19% -1.99% +0.6931 +0.6909
ar
Euro/Swiss EURCHF= 1.1222 1.1244 -0.20% -0.30% +1.1252 +1.1210
Euro/Sterling EURGBP= 0.8816 0.8819 -0.03% -1.86% +0.8832 +0.8798
NZ NZD= 0.6507 0.6541 -0.52% -3.13% +0.6552 +0.6507
Dollar/Dollar
Dollar/Norway NOK= 8.7683 8.7218 +0.53% +1.50% +8.7749 +8.7128
Euro/Norway EURNOK= 9.7605 9.7366 +0.25% -1.47% +9.7770 +9.7312
Dollar/Sweden SEK= 9.5789 9.5958 -0.46% +6.86% +9.6144 +9.5553
Euro/Sweden EURSEK= 10.6630 10.7120 -0.46% +3.90% +10.7253 +10.6634
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Major currencies YTD https://tmsnrt.rs/2I3cK4Y
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>