FOREX-Euro and yen gain before Trump's press conference on China

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Trump plans China news conference for Friday
* Euro set for second weeks of gains

By Julien Ponthus
LONDON, May 29 (Reuters) - The euro extended its gains on
Friday to a two-month high as traders waited for U.S. President
Donald Trump's response to China's tightening control over Hong
Kong, which could further worsen tensions between the two over
the financial hub.
The yen rose against major currencies as investors looked
for safe havens before Trump's response to China's passing of a
national security law for Hong Kong
"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.
"You can never quite predict Trump. But I think this year
it's really difficult for him to do tough action", he added,
referring to the dire state of the U.S. economy.
Offshore, the yuan CNH=EBS was little changed and traded
at 7.1661 per dollar, not far from the nine-month low of 7.1965
yuan per dollar reached on Wednesday.
The euro, which got a boost following the European
Commission's stimulus plan announced earlier this week, rose
0.2% to $1.111 EUR=EBS , its highest since March 30.
The common currency was headed for its second weekly gain
after the 750 billion-euro coronavirus recovery fund fuelled
optimism about the euro zone economy.
The pound fell against the euro. The single currency was
last up 0.3% at 90.145 pence EURGBP=D3 .
The pound has been hurt by calls for the resignation of an
aide to British Prime Minister Boris Johnson, lack of progress
in EU trade talks, and speculation about negative interest
rates.
Sterling GBP=D3 was stable against the dollar, down 0.04%
at $1.2312 but still on course for its second weekly gain.
The dollar fell 0.4% against the Japanese currency JPY=EBS
at 107.17 yen.
The Australian dollar AUD=D3 fetched $0.6650, close to its
highest in more than two months. The New Zealand dollar NZD=D3
traded at $0.6208, near its strongest since early March.
The Aussie and the kiwi were on course for weekly gains as
investors cheered the gradual re-opening of business activity in
the countries.