* Hong Kong, Italy, Britain news helps risk appetite
* Euro lifted away from 28-month lows, Lagarde comments help
* Sterling jumps as UK lower house moves to block no-deal
Brexit
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, adds quote)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 4 (Reuters) - The safe-haven dollar and yen
fell on Wednesday after global political worries eased with what
markets perceived as positive news in Hong Kong, Italy and
Britain.
Sterling rallied above $1.22 on Wednesday for the first time
since Aug. 30 as investors grew more optimistic after British
lawmakers took another step in an attempt to block a no-deal
Brexit. 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 news that Hong Kong leader Carrie Lam
was withdrawing an extradition bill that triggered months of
often violent protests. 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," Moya said. "This is providing a little bit
of unwinding of some dollar bullish positions."
In Italy, Prime Minister Giuseppe Conte unveiled a new
cabinet that united the anti-establishment 5-Star Movement and
the centre-left Democratic Party, an unlikely coalition that is
expected to improve ties with the European Union. In late U.S. trading, the dollar was last down 0.57% against
a basket of major currencies, at 98.438 .DXY .
The yen fell against the dollar, which rose 0.38% to 106.36
yen JPY=EBS . It also declined against the euro, which gained
0.89% to 117.32 yen EURJPY=EBS .
The euro also rose 0.52% versus the dollar to $1.10295
EUR=EBS 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 rate 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.
Meanwhile, sterling jumped 1.15% to $1.2226 GBP=D3 , and
against the euro it rallied 0.65% to 90.22 pence EURGBP=D3 .
The lower house of the British parliament voted on Wednesday
to prevent Prime Minister Boris Johnson taking Britain out of
the EU without a deal, but he proposed a snap election on Oct.
15, just weeks before Brexit, to free his hands. Currency bid prices at 4:19PM (2019 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1027 $1.0972 +0.50% -3.85% +1.1037 +1.0969
Dollar/Yen JPY= 106.3300 105.9200 +0.39% -3.56% +106.4300 +105.8400
Euro/Yen EURJPY= 117.29 116.24 +0.90% -7.07% +117.4000 +116.1400
Dollar/Swiss CHF= 0.9807 0.9866 -0.60% -0.07% +0.9883 +0.9799
Sterling/Dollar GBP= 1.2224 1.2084 +1.16% -4.18% +1.2229 +1.2079
Dollar/Canadian CAD= 1.3225 1.3332 -0.80% -3.02% +1.3344 +1.3218
Australian/Doll AUD= 0.6795 0.6757 +0.56% -3.60% +0.6800 +0.6756
Euro/Swiss EURCHF= 1.0816 1.0828 -0.11% -3.89% +1.0860 +1.0812
Euro/Sterling EURGBP= 0.9021 0.9078 -0.63% +0.41% +0.9085 +0.9018
NZ NZD= 0.6359 0.6334 +0.39% -5.33% +0.6364 +0.6327
Dollar/Dollar
Dollar/Norway NOK= 9.0300 9.1004 -0.77% +4.53% +9.1066 +9.0279
Euro/Norway EURNOK= 9.9598 9.9889 -0.29% +0.54% +9.9935 +9.9605
Dollar/Sweden SEK= 9.7380 9.8197 -0.33% +8.64% +9.8253 +9.7280
Euro/Sweden EURSEK= 10.7410 10.7771 -0.33% +4.65% +10.7771 +10.7320