* Dollar mostly holds overnight gains
* Moves slight as markets in holding pattern, watching trade
talks
* Aussie and kiwi perk up, move may be short-lived
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Tom Westbrook and Stanley White
SINGAPORE/TOKYO, Oct 8 (Reuters) - The dollar found support
on Tuesday while investors awaited the outcome from crucial
Sino-U.S. trade talks in Washington, with many staying cautious
as neither side has shown signs of giving ground at the
negotiations.
The Chinese yuan firmed in onshore and offshore trade as
Chinese financial markets reopened after a week-long holiday.
The Australian and New Zealand dollars, whose fortunes are
often linked with global trade, edged higher as some investors
reduced bearish bets. Dealers warned this move could fade
depending on the tone of the trade talks in Washington.
Hopes for a breakthrough are not high, but some investors
are trying to scale back their positions, at least temporarily,
because the outcome of the trade negotiations cannot be
predicted.
"No-one can be confident about these talks, except our
inclination has long been that the talks are more likely to
disappoint than to please market expectations," said Sean
Callow, currency strategist at Westpac in Sydney.
"The U.S. and China are just too far apart on key issues,"
he said, leaving only a very limited deal in prospect.
The dollar rose 0.14% to 107.18 yen JPY=EBS , approaching a
one-week high reached on Monday.
Against a basket of currencies .DXY , the dollar steadied
at 98.959.
In the onshore market, the yuan CNY=CFXS traded at 7.1263
per dollar, stronger than its previous close of 7.1480 on Sept.
30. In the offshore market, the yuan CNH=D3 gained around 0.1%
to 7.1257 per dollar.
Deputy-level meetings between U.S. and Chinese trade
negotiators began in Washington on Monday, with little immediate
signs of progress. Top-level talks are scheduled to begin on Thursday, when
Chinese Vice Premier Liu He meets U.S. Trade Representative
Robert Lighthizer and Treasury Secretary Steven Mnuchin.
The talks are getting under way about a week before a
scheduled increase in U.S. tariffs on $250 billion worth of
Chinese goods, to 30% from 25%.
U.S. President Donald Trump has said the tariff increase
will take effect if no progress is made in the negotiations. The
United States on Monday added 28 Chinese public security bureaus
and companies to a trade blacklist. Masaru Ishibashi, joint general manager of the trading
department at Sumitomo Mitsui Banking Corp in Tokyo, said the
dollar is benefiting from "waning pessimism about the U.S.
economy".
"In addition, speculators are trying to lighten their
positions related to the trade war, which is helping some
commodity currencies," he said. "The next move depends entirely
on what the trade talks produce."
The Australian dollar AUD=D3 rose 0.24% to $0.6748, while
the New Zealand dollar NZD=D3 advanced by 0.46% at $0.6318.
The antipodean currencies have generally been on a downtrend
since early September as weaker-than-expected economic
indicators pointed to a need for more policy easing by Australia
and New Zealand.
However, both the Aussie and the kiwi have moved up from
recent lows, which dealers say is partly because some investors
squared off positions before the trade talks.
The euro EUR=EBS held steady around $1.0975 as the single
currency slowly gets some distance from a 2-1/2 year low hit
last week.
Sterling GBP=D3 last traded at $1.2296. The pound has been
confined to a narrow range recently, but investors are growing
increasingly concerned about a lack of progress between Britain
and the European Union to agree a Brexit withdrawal deal.