FOREX-Dollar steadies against euro; yuan slips on U.S.-China tensions

* Offshore yuan stumbles to nine-month low
* Yen, Swiss franc under pressure

(New throughout, updates prices, market activity, comments to
U.S. market open; new byline, changes dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, May 27 (Reuters) - The dollar steadied against the
euro on Wednesday even as the common currency remained supported
by news of a proposal for an economic recovery package to help
the euro zone region recover from the coronavirus pandemic.
The euro EUR=EBS was about flat against the dollar at
$1.0979, after rising as high as $1.10315, its strongest since
April 1. The common currency gained 0.8% on the greenback on
Tuesday.
The European Union's executive unveiled a 750 billion euro
($825.23 billion) plan on Wednesday to prop up economies
hammered by the coronavirus crisis, hoping to end months of
squabbling over how to fund a recovery that has exposed
faultlines across the 27-nation bloc. "An overnight rally helped the euro finally break above key
psychological resistance," said Joe Manimbo, senior market
analyst, at Western Union Business Solutions in Washington.
"Still, deep divisions remain among EU nations about the
strings attached to the aid, a factor that could limit euro
gains," Manimbo said.
The euro has struggled since falling in March, when
investors rushed for the safety of dollars amid increased
volatility in global financial markets.
Perceived safe-haven currencies, the Japanese yen and the
Swiss franc, came under pressure on Wednesday as investors
looked past increased U.S.-China tensions to bet on riskier
assets in the hopes of a quick rebound from the economic hit
from the coronavirus pandemic.
Against the yen, which tends to draw investors during times
of geopolitical or financial stress given Japan's status as the
world's largest creditor, the dollar was 0.21% higher. JPY=EBS
The greenback was up 0.39% against the franc CHF=EBS ,
after Swiss National Bank Chairman Thomas Jordan said Swiss
monetary policy must remain accommodative. Worries about the U.S. response to China's proposed security
law for Hong Kong, however, kept safe-haven currencies from
seeing sharper declines.
U.S. President Donald Trump said on Tuesday the United
States would announce before the end of the week its response to
China's planned security bill for Hong Kong. The offshore yuan CNH=D3 fell to its lowest against the
dollar since September of last year, during the U.S.-China trade
dispute. Sterling GBP=D3 retreated below $1.23 as investor focus
shifted back to the possibility of negative interest rates in
Britain and comments from government officials that not much
progress had been made in Brexit negotiations.

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GRAPHIC: U.S. dollar vs offshore yuan https://tmsnrt.rs/2M7srKJ
GRAPHIC: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
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