* Australian dollar, New Zealand dollar bounce on trade
optimism
* Pound holds earlier gains, but eases off slightly
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Olga Cotaga
LONDON, Sept 5 (Reuters) - The Japanese yen slipped and
risky currencies flourished on Thursday as investors turned more
optimistic that the United States will find common ground with
China on trade after agreeing to hold talks in October.
Chinese representatives will travel to Washington next
month, China's commerce ministry said on Thursday. "This news has injected a fair amount of optimism in
markets," said Prashant Newnaha, senior rates strategist at TD
Securities in Singapore.
"It does seem that the markets were positioning more
bearishly, and now we've gotten this potential good news and the
markets are running with it," he said, adding global economic
indicators had also recently been showing some green shoots.
The pound also gained ground, boosted by hopes that a
no-deal Brexit will be avoided. British lawmakers approved
legislation on Wednesday to extend the Brexit deadline for the
third time and rejected Prime Minister Boris Johnson's motion to
hold a snap election. "An amazing day when sterling is the best performer and the
Japanese yen is the worst," said Marshal Gittler, a strategist
at ACLS Global. "Must indicate a real drop in risk sentiment,
particularly with regards to Brexit!"
The yen plunged to a three-week low of 106.75 against the
dollar JPY=EBS , although it was last trading neutral at
106.41.
The Chinese yuan rose to a two-week high of 7.1213 against
the dollar in the offshore market CNH=EBS and was last up by
0.1% at 7.1382.
The Australian dollar rose to a one-month high of 0.68255
against the U.S. dollar AUD=D3 and was last up 0.2% at 0.6811.
The New Zealand dollar rose to a nine-day at 0.6379 NZD=D3 .
The dollar was flat against both the euro and five other
major currencies .DXY . Euro/dollar was last at $1.1029
EUR=EBS .
Sterling was last trading down 0.3% at $1.2220 GBP=D3 . It
had earlier reached an eight-day high of $1.2262. Against the
euro, the pound was down 0.2% at 90.245 pence EURGBP=D3 .