* Trump announces partial trade deal with China
* Sterling rises to 3-month high vs dollar
* Safe-haven yen drops to 2-1/2-month low vs dollar
* EU, Britain to hold intense negotiations on Brexit deal
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds new comment, Trump announcement of China trade deal,
updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 11 (Reuters) - The dollar dropped to a
three-month low on Friday, as safe-haven buying eased and risk
sentiment improved on optimism about U.S.-China trade
negotiations as well as increased chances for an orderly British
exit from the European Union.
The dollar, however, cut losses against the euro and pared
gains versus the yen after President Donald Trump announced a
partial agreement on trade with China, specifically on
intellectual property, financial services, and huge agricultural
purchases. Edward Moya, senior market analyst at OANDA in New York,
said the dollar's moves after Trump's announcement were in line
with the typical "buy the rumor, sell the news" reaction.
"We pretty much got what many people were expecting about a
partial deal," said Moya. "But it doesn't necessarily provide
optimism that in the short run a broader deal will be reached
because there are greater issues. It's still positive though."
Sterling rose to a more than three-month high versus the
dollar on optimism about Brexit, while the euro advanced to a
three-week peak as risk appetite rose.
At the same time, other safe-haven currencies such as the
yen and Swiss franc slid on the day.
Before the trade deal announcement, Trump and other U.S.
officials on Friday had signaled good news was coming in trade
talks with China, while Beijing indicated it was open to a
"partial" deal that would avoid a planned hike in tariffs on its
goods.
On Brexit, the EU agreed on Friday to hold another round of
intense negotiations with London in a bid to secure a deal.
EU negotiator Michel Barnier and his British counterpart
Stephen Barclay earlier held what both sides called a
"constructive" meeting in Brussels as Britain's scheduled
departure date of Oct. 31 nears. The British and Irish prime
ministers said on Thursday they had found "a pathway" to a
possible deal, and by Friday some officials were expressing
guarded optimism.
In the United States, the Federal Reserve announced Friday
it will start buying about $60 billion per month in Treasury
bills to ensure "ample reserves" in the banking system. It
emphasized though that the new program does not mark a change in
monetary policy. "This allays some of the funding concerns and removes some
of the upside risks of the squeeze on funding that we saw at
month- and quarter-end," said Shaun Osborne, chief FX strategist
at Scotiabank in Toronto.
In late afternoon trading, the dollar index was down 0.4% at
98.318 .DXY , after earlier declining to a 3-1/2-month low of
98.197.
The euro, meanwhile, rose 0.3% to $1.1034 EUR= , mirroring
the three-week high reached on Thursday.
The safe-haven yen JPY= weakened against the dollar, which
gained 0.3% to 108.33. The dollar earlier touched a 2-1/2-month
high against the yen.
Sterling surged to a more than three-month high of $1.2708
GBP=D3 and a five-month peak of 87.02 pence against the euro
EURGBP=D3 . The pound was last up 1.7% at $1.2657.
========================================================
Currency bid prices at 4:23PM (2023 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1037 $1.1004 +0.30% -3.78% +1.1062 +1.1002
Dollar/Yen JPY= 108.3500 107.9600 +0.36% -1.73% +108.6100 +107.8600
Euro/Yen EURJPY= 119.59 118.80 +0.66% -5.25% +119.9900 +118.7400
Dollar/Swiss CHF= 0.9971 0.9969 +0.02% +1.60% +0.9990 +0.9959
Sterling/Dollar GBP= 1.2650 1.2440 +1.69% -0.84% +1.2705 +1.2409
Dollar/Canadian CAD= 1.3204 1.3290 -0.65% -3.18% +1.3300 +1.3170
Australian/Doll AUD= 0.6790 0.6761 +0.43% -3.67% +0.6810 +0.6754
Euro/Swiss EURCHF= 1.1006 1.0970 +0.33% -2.20% +1.1039 +1.0966
Euro/Sterling EURGBP= 0.8721 0.8845 -1.40% -2.93% +0.8868 +0.8696
NZ NZD= 0.6332 0.6318 +0.22% -5.73% +0.6353 +0.6317
Dollar/Dollar
Dollar/Norway NOK= 9.0770 9.1238 -0.51% +5.07% +9.1290 +9.0509
Euro/Norway EURNOK= 10.0201 10.0430 -0.23% +1.12% +10.0510 +10.0015
Dollar/Sweden SEK= 9.8034 9.8403 -0.07% +9.37% +9.8465 +9.7863
Euro/Sweden EURSEK= 10.8221 10.8301 -0.07% +5.44% +10.8546 +10.8090