* Australian dollar rises to 1-week high, after slipping
earlier
* Japanese yen falls after reaching six-day low vs dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Olga Cotaga
LONDON, June 23 (Reuters) - The euro and other currencies
were higher on Tuesday after White House trade adviser Peter
Navarro said his comments that the trade deal with China was
"over" were taken out of context.
The common currency got a boost by French business activity
rebounding more than expected in June, returning to growth after
three months of an unprecedented downturn. Navarro said on Monday the trade deal with China "continues
in place", walking back on his earlier remarks that the pact was
"over", stoking volatility in markets already frazzled by the
coronavirus pandemic.
Navarro said his comments were taken "wildly out of
context", while U.S. President Donald Trump said in a tweet the
deal with the China was "fully intact". The Australian dollar rose to a one-week high, having fallen
earlier, and the safe-haven Japanese yen slipped to a six-day
low as a result.
"We expect limited further fallout, with President Trump
expected to remain committed to the phase one trade deal in the
run up to the election," said Lee Harman, currency analyst at
MUFG.
"However, last night's price action does highlight that the
FX market remains sensitive to trade policy uncertainty. It
remains a potential trigger for higher volatility," he said.
Euro overnight volatility rose to nearly 10%, the highest in
nearly three weeks. EURONO=FN
The wild swings in currencies come as the market is also
torn between hopes of economic re-opening in many parts of the
world and signs coronavirus infections are rising in the United
States.
The Australian dollar traded up 0.3% at 0.6928 AUD=D4 ,
after rising to 0.6935, highest since June 16. Before that, it
had fallen as much as 0.7%.
The offshore Chinese yuan pared much of its earlier losses
to trade at 7.0669 per dollar in the offshore market CNH=EBS ,
up 0.2% on the day.
The safe-haven Japanese yen fell 0.2% to 107.10 against the
greenback JPY=EBS .
The euro rose 0.3% to $1.1306, a one-week high EUR=EBS .
"There was also a brief flurry of U.S. dollar demand between
2 a.m. and 3 a.m. London time that dragged euro/dollar to a low
of $1.1233, but U.S. dollar strength pored short-lived," Hardman
said.
Elsewhere, Scandinavian currencies rebounded as well, with
the Norwegian crown rallying more than 1% against the dollar and
by 0.7% versus the euro.
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