* Risk-on sentiment seen across major currencies
* China spokesman boosts trade deal hopes
* Dollar gains versus yen
* Safe-haven currencies suffer
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Elizabeth Howcroft
Nov 7 (Reuters) - The dollar gained versus the yen on
Thursday after comments from a Chinese commerce ministry
spokesman about the terms of a possible trade deal prompted
investors to dump perceived safe-havens such as the Japanese
currency.
The Chinese commerce ministry said that China and the U.S.
must simultaneously cancel some existing tariffs on each other's
goods for both sides to reach a "phase one" trade deal.
The proportion of tariffs cancelled must be the same, and
how many tariffs should be cancelled can be negotiated, said the
spokesman. The dollar jumped up to near three-month highs versus the
yen, retracing its 0.3% losses from earlier in the session, as
investors interpreted the comments as positive news, reducing
demand for safe-haven currencies JPY=EBS . Adam Cole, chief currency strategist at RBC Capital Markets
said the Chinese comments improved market sentiment around the
trade negotiations.
"I think the best people hoped for was that we would avoid
the next tranche of tariffs kicking in, whereas momentum seems
to be moving in the direction of existing tariffs rolling back,"
he said.
Hopes for a trade deal had been waning after a senior
official of the Trump administration told Reuters on Wednesday
that a meeting to sign the deal could be delayed until December
and that a venue had not yet been agreed. "Expectations were depressed and it's not hard to beat
expectations when they're that low," he added.
China's offshore yuan strengthened past the key 7 per dollar
level, touching its strongest level in three months, which it
also reached on Tuesday. The Australian and New Zealand dollars - proxies for risk
which had been weakening due to uncertainty surrounding the
possible trade deal - also gained on the comments with the
Aussie up 0.2% versus the dollar. AUD=D3 .
Similar gains were seen in the Norwegian and Swedish crowns,
which RBC's Cole said were also acting as proxies for risk
NOK=D3 SEK=D3 .
Against a basket of currencies, the dollar traded broadly
flat, slightly down at -0.1% .DXY .
The United States and China have imposed tariffs on each
other's goods in a 16-month long trade war that rippled across
financial markets, slowed global investments and growth.
Investors hope a preliminary trade agreement rolls back at
least some of the tariffs, but negotiations between Washington
and Beijing have been fractious, making an agreement far from
certain.
The euro was up 0.1% against the dollar EUR=EBS , having
hit three-week lows after positive U.S. data.
MUFG analysts wrote in a note to clients that the euro was
nearing levels where it would be poised for a recovery.