FOREX-Dollar set for weekly loss; Kiwi dollar hits 18-month high

* Dollar down 0.1% after weak data
* Dollar-yen below key 105 level
* Kiwi dollar gains after positive economic comments
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices, adds comment)
By Elizabeth Howcroft
LONDON, Sept 18 (Reuters) - The dollar was unable to shake
off the previous session's lows on Friday and was set for a
weekly fall, losing out to the Japanese yen in particular, which
hit a seven-week high as investors sought the safe-haven
currency.
Data released on Thursday showed that the number of people
in the United States filing new claims for unemployment benefits
fell less than expected, suggesting the country's market
recovery is stalling. The dollar - which had been boosted by the Federal Reserve
upgrading its 2020 economic forecast earlier this week - gave up
those gains, and was flat versus a basket of currencies, at 1049
GMT, set for a weekly loss of around 0.4%.
The Japanese yen gained against the dollar, hitting a new
seven-week high of 104.270 at 1008 GMT, before easing to 104.325
per U.S. dollar by 1050 GMT, down 0.4% on the day JPY=EBS .
"This move is mainly about the dollar," Rabobank senior FX
strategist Jane Foley said, noting that the yen had moved less
against other currencies in recent months.
"This is one to be watching closely because there is a lot
of political uncertainty and there is a lot of geopolitics and I
think this is going to be increasingly seen as we go into the
last months of this year and as we go into next year," she said.
The upcoming U.S. election, as well as China's worsening
relations with the United States and India, are all contributing
to the demand for the yen, Foley said.
At its meeting, the Bank of Japan maintained its -0.1%
short-term interest rate target and a pledge to cap 10-year bond
yields around zero, as widely expected. Tokyo markets will be closed on Monday and Tuesday next
week, so investors positioning for thin liquidity could also
have played a role in Friday's yen move.
There was still some risk appetite in currency markets, as
the New Zealand dollar strengthened overnight and hit its
highest in a year and a half in early London trading, after the
country's finance minister sounded positive about the economy in
television interviews. "Given these optimistic comments and the 'risk-on' tone in
stock markets in Asia this morning, I think we could see further
gains in NZD," Marshall Gittler, head of investment research at
BDSwiss Group, wrote.
The Reserve Bank of New Zealand meets next week. The
governor has said that the policy rate will stay at 0.25% until
next March.
At 1059 GMT, the New Zealand dollar was at 0.6782 versus the
U.S. dollar, up 0.5% on the day NZD=D3 .
The Australian dollar was flat versus the U.S. dollar, at
0.73100 AUD=D3 .
The Norwegian crown benefited from oil prices rising for the
fourth day straight early in the session, but erased these gains
and was flat at 9.0515 at 1100 GMT NOK=D3 . The euro fell slightly, to $1.18390, and was set for a small
weekly loss EUR=EBS .
The pound was a touch stronger at $1.2977 and 91.215 pence
per euro GBP=D3 EURGBP=D3 .
The currency fell sharply on Thursday when the Bank of
England said monetary policymakers had been briefed on how to
implement negative rates, but recovered later in the session.
The European Union's Brexit negotiator said he thinks a
Brexit trade deal with Britain is still possible.