FOREX-Dollar weak vs. euro; Trump news conference on China on tap

* Trump plans China news conference for Friday
* Sterling steady vs. Euro ahead of Brexit talks next week

(New throughout, updates prices, market activity, comments to
U.S. market open; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, May 29 (Reuters) - The dollar extended its slide
against a surging euro on Friday, hurt by month-end flows and as
the common currency continued to enjoy a boost from the European
Union's recently announced plan to prop up the bloc's
coronavirus-hit economies with a 750 billion-euro ($828 billion)
recovery fund.
The dollar, a safe-haven currency, found some support as
traders awaited U.S. President Donald Trump's response to
China's tightening control over Hong Kong, which could worsen
tensions between the two powers over the financial hub.
The euro EUR= was 0.32% higher at $1.1112, on pace for its
fourth straight day of gains. The euro's rally this week has
pushed it over its 200-day moving average for the first time
since late March and lifted it about 2% for the week, its best
weekly gain in nine weeks.
Much of the euro's move was driven by optimism generated by
the European Commission's stimulus plan announced earlier this
week, as well as investors' improved appetite for risk-taking as
global economies gradually move to reopen after
coronavirus-linked shutdowns, analysts said.
Month-end adjustments to portfolio hedges, after a more than
3% rally in May for U.S. stocks, was also weighing on the
dollar, said Stephen Innes, chief global markets strategist at
AxiCorp.
"The 3%-plus jump in equities this month suggests a
medium-sized USD sell program into month-end," said Innes.
The euro was also helped by data that showed inflation
continued to slow on crashing oil prices but underlying price
growth held steady, a hopeful sign for European Central Bank
policymakers trying to stave off deflation. With Trump due to announce later on Friday his response to
the Chinese parliament's advancement this week of security
legislation for Hong Kong - which many lawyers, diplomats and
investors fear could erode the city's freedoms - the dollar's
losses were limited.
"I think the market is still fearful that it might escalate
into something more serious. If he was serious with trade
tariffs, that would have a meaningful impact", said Moh Siong
Sim, a currency strategist at Bank of Singapore.
The pound GBP= was about flat against the euro and the
dollar ahead of a new round of Brexit talks next week.

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GRAPHIC: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
GRAPHIC: Euro dollar exchange rate https://tmsnrt.rs/2XG8Cjg
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