* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Oct 8 (Reuters) - The dollar fell on Tuesday, with
the New Zealand dollar leading gains against the U.S. currency,
as a rally in Asian equities spilled over into currency markets.
Despite doubts a trade deal will be reached when trade talks
between Beijing and Washington resume this week, market watchers
attributed the moves to positioning after a bout of volatility
last week.
"We had a lot of market volatility last week, and the
current move in the high-beta currencies is due to some
unwinding of extreme long positions in the dollar," said Morten
Lund, a senior FX strategist at Nordea.
The latest futures data showed hedge funds have added to
their massive long dollar positions. Against a basket of other currencies .DXY , the dollar
dipped 0.1% to 98.85 after posting its biggest single-day rise
in a week in the previous session.
Markets will be looking for comments from U.S. Federal
Reserve Chairman Jerome Powell later in the day after some weak
U.S. data last week raised concerns the U.S. economy may be
heading towards a protracted slowdown.
The euro EUR=EBS got a boost from German industrial
output, data which unexpectedly rose in August. The single currency gained 0.2% to $1.0989 but remained
within sight of last week's $1.08790, its lowest in more than
two years.
The Chinese yuan rose in onshore and offshore trade as
Chinese financial markets re-opened after a week-long holiday.
The Australian and New Zealand dollars, which are linked to
global trade, edged higher as some investors reduced bearish
bets. Dealers warned the move could fade depending on the trade
talks in Washington.
Deputy-level meetings between U.S. and Chinese trade
negotiators began in Washington on Monday, with little immediate
signs of progress. Elsewhere, sterling dived to a one-month low against the
euro on Tuesday on reports that Brexit talks are close to
breakdown. GBP/
US dollar and CFTC https://tmsnrt.rs/2nvttrw
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