* Japanese yen near 5-month low vs. dollar
* Chinese offshore yuan set for sixth winning week vs.
dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Olga Cotaga
LONDON, Nov 8 (Reuters) - The euro held steady Friday,
though flirting with a three-week low against the dollar as the
U.S. currency benefited from news that China and the U.S. had
agreed to roll back tariffs as part of a potential preliminary
pact to end their trade war.
China and the United States have agreed to roll back tariffs
on each others' goods in a "phase one" trade deal if it is
completed, officials from both sides said on Thursday.
Sentiment is likely to remain supportive for the dollar,
equities and other risky assets as a de-escalation in the
U.S.-China trade war removes a huge risk to the global economic
outlook.
However, there is still some scepticism about a trade deal
as officials inside and outside the White House have bristled at
the notion of giving up punitive tariffs.
Muddying the waters further, White House spokeswoman
Stephanie Grisham told Fox News Channel on Thursday that the
United States is "very, very optimistic" about reaching a trade
deal with China soon. "When the trade war was looking like it was worsening,
people were buying dollars as a safe haven. Now that the trade
war seems to be winding down, people are buying dollars because
the U.S. economy will benefit," said Marshall Gittler,
strategist at ACLS Global.
"The market's attitude towards the euro is just plain
negative right now," he said, adding that he expects the risk
sentiment to wind down "unless or until the U.S. administration
chimes in with some confirmation" that the tariffs will be
rolled back.
The euro was neutral at $1.10495 EUR=EBS , close to the
three-week low of $1.10355 it reached on Thursday.
The prospects of an end to the U.S.-China trade war left the
safe haven yen nursing losses against most major currencies.
Versus the dollar, the yen was near a five-month low
JPY=EBS and against the Australian dollar the Japanese
currency was close to a 15-week low AUDJPY=D3 .
"The overall tone is risk-on, which is a positive for the
dollar and a negative for the yen," said Tsutomu Soma, general
manager of fixed income business solutions at SBI Securities Co
in Tokyo.
"We can see this in other markets, which is why stocks are
so strong. We still need to figure out when the United States
and China will sign this deal, but the mood so far is supportive
for markets."
The progress in resolving the 16-month-long trade war also
supported the China's yuan. In the offshore market, the yuan
CNH=EBS traded at 6.9834 per dollar, close to a three-month
high it jumped to on Thursday. The yuan was set for its sixth
straight weekly gain.
Traders will be watching for the University of Michigan
consumer survey in the United States, due at 1500 GMT.
Economists polled by Reuters expect the survey to inch slightly
higher to 95.9 in November from 95.5 in October.
The pound GBP=D3 traded a $1.2816, close to the lowest
since Oct. 24, on course for a 1% decline this week.
Hitherto, the Bank of England has resisted following the
U.S. Federal Reserve and the European Central Bank in cutting
its main interest rate, but the outcome of Thursday's meeting
suggests the central bank is poised to change its stance.