* Hong Kong, Italy, Britain news helps risk appetite
* Euro lifted away from 28-month lows, Lagarde comments help
* Dollar weakness helps emerging market currencies
* Sterling bounces on bid to stop no-deal Brexit
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Recasts, updates prices, adds comment, FX table, changes
byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 4 (Reuters) - The safe-haven dollar and yen
fell on Wednesday as risk sentiment improved after global
political worries eased with what markets perceived as positive
news in Hong Kong, Italy and Britain.
The dollar index slid for a second straight session, while
the yen, which draws safe-haven bids in times of geopolitical
stress, dropped for the first time in four days against the
greenback.
Risk appetite rose on reports Hong Kong leader Carrie Lam
would announce the formal withdrawal of an extradition bill that
triggered months of unrest. In Italy, the 5-Star Movement approved a coalition deal with
the Democratic Party, paving the way for a new government, while
lawmakers opposed to a no-deal Brexit gained the upper hand in
Britain, triggering a global equities rally.
Edward Moya, senior market analyst at OANDA in New York,
said the dollar's weakness was triggered by this "risk-on move
in Hong Kong that gave Hong Kong equities one of the best moves
in a few years." That has boosted appetite for riskier
currencies that have generally higher yields, he added.
"Everyone has been waiting for this major dollar reversal
for quite some time. It has never come to fruition," Moya said.
"This is providing a little bit of unwinding of some dollar
bullish positions."
In mid-morning trading, the dollar was last down 0.4%
against a basket of major currencies, at 98.656 .DXY .
The yen fell against the dollar, which rose 0.3% to 106.27
yen JPY= . It also declined against the euro, which gained 0.7%
to 117.045 yen EURJPY= .
The euro also rose 0.4% versus the dollar to $1.1011 EUR=
after comments from Christine Lagarde, who will likely be the
European Central Bank's next president, introduced some doubt
over the scale of an ECB stimulus package expected next week.
Lagarde said highly accommodative monetary policy for a
prolonged period was necessary but she added that the bank
needed to be mindful of the negative side-effects of such tools.
Expectations for an interest cut, the relaunch of asset
purchases and other ECB measures to stimulate the economy have
weighed on the euro. On Tuesday, it hit a 28-month low around
$1.0924.
YUAN, POUND REBOUND
The dollar's weakness helped China's offshore yuan CNH=
pull away further from record lows plumbed earlier this week.
The Chinese currency was last up 0.4% against the dollar, which
fell to 7.1511 yuan.
The British pound recovered Tuesday's losses, when it hit a
three-year low, after the latest parliamentary attempt to stop a
no-deal Brexit took a step forward.
Sterling bounced 0.9% to $1.2185 GBP=D3 , and against the
euro it rallied 0.4% to 90.45 pence EURGBP=D3 .
Lawmakers who defeated Prime Minister Boris Johnson's
government on a crucial motion late on Tuesday are expected to
introduce a bill in parliament seeking to stop Britain from
leaving the European Union on Oct. 31 without transitional
arrangements. Currency bid prices at 10:03 AM (1403 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1009 $1.0972 +0.34% -4.01% +1.1024 +1.0969
Dollar/Yen JPY= 106.2500 105.9200 +0.31% -3.64% +106.3300 +105.8400
Euro/Yen EURJPY= 117.00 116.24 +0.65% -7.30% +117.1400 +116.1400
Dollar/Swiss CHF= 0.9839 0.9866 -0.27% +0.25% +0.9883 +0.9840
Sterling/Dollar GBP= 1.2166 1.2084 +0.68% -4.63% +1.2219 +1.2079
Dollar/Canadian CAD= 1.3278 1.3332 -0.41% -2.63% +1.3344 +1.3268
Australian/Doll AUD= 0.6788 0.6757 +0.46% -3.72% +0.6792 +0.6756
Euro/Swiss EURCHF= 1.0836 1.0828 +0.07% -3.71% +1.0860 +1.0825
Euro/Sterling EURGBP= 0.9048 0.9078 -0.33% +0.71% +0.9085 +0.9018
NZ NZD= 0.6347 0.6334 +0.21% -5.51% +0.6362 +0.6327
Dollar/Dollar
Dollar/Norway NOK= 9.0583 9.1004 -0.46% +4.86% +9.1066 +9.0530
Euro/Norway EURNOK= 9.9742 9.9889 -0.15% +0.69% +9.9935 +9.9613
Dollar/Sweden SEK= 9.7711 9.8197 -0.18% +9.01% +9.8253 +9.7494
Euro/Sweden EURSEK= 10.7581 10.7771 -0.18% +4.81% +10.7771 +10.7320