* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Result of British general election may ease concern about
Brexit
* U.S.-China trade deal boosts yuan
* Safe-haven yen weakens on trade news
* Traders brace for wild ride in financial markets
By Stanley White
TOKYO, Dec 13 (Reuters) - The pound rose to a
three-and-a-half year high versus the euro and the highest in
more than a year versus the dollar after exit polls suggested a
win for the Conservatives, which should help ensure the UK's
smooth exit from the European Union.
The Chinese yuan rose in offshore trade and the Japanese yen
fell after a source told Reuters that the United States and
China have agreed some tariff reductions and a delay on tariffs
set to go effect on Dec. 15. The early results suggest the election will relieve almost
four years of uncertainty about when Brexit would take place,
which should be supportive of the pound. A successful scaling back of trade tension would relieve one
major headwind to economic growth, which suggests lower demand
for the safe-haven yen. Avoiding new tariffs should also be a
boost to China's slowing economy, which should draw more
investors to the yuan.
"We've already seen a strong reaction in the pound from the
exit poll," said Michael McCarthy, chief market strategist at
CMC Markets in Sydney.
"We also see a rise in stock futures in reaction to two very
important pieces of news for markets. This should support global
growth. The yuan can also go higher, but it depends on how much
dollar strength we get."
Against the euro, sterling EURGBP=D3 rose around 2% to as
high as 82.80 pence, the highest since July 2016, which is
shortly after the Brexit referendum that hammered the currency.
The pound GBP=D3 surged by 2.2% to $1.3474, reaching the
highest since May 2018.
The pound plunged more than 10% in the immediate aftermath
of Britain's vote to leave the European Union in June 2016,
while $2 trillion was wiped off world markets.
The exit poll, which suggested UK Prime Minister Boris
Johnson would get a majority of 86 - the largest of any
Conservative leader since Margaret Thatcher won in the 1980s -
should empower him to deliver Brexit on Jan. 31.
Official results will be declared over the next seven hours.
Even if Brexit is completed on Jan. 31, there is still some
uncertainty because Britain will then enter a transition period
during which it will negotiate a new relationship with the
remaining 27 EU states.
In the offshore market, the Chinese yuan CNH=D3 rose 0.33%
to 6.9273 per dollar, after surging on Thursday to the highest
since Aug. 1 due to relief about a resolution to trade friction.
As part of the trade deal, China has also agreed to purchase
$50 billion of U.S. agricultural goods next year, sources
familiar with the talks told Reuters.
The yuan rallied and the yen fell late on Thursday after
Bloomberg News reported that U.S. President Donald Trump signed
off on a trade deal with China that will delay a new round of
tariffs scheduled for Dec. 15. A trade dispute between the United States and China over
Chinese trading practices that Washington says are unfair has
dragged on for almost two years, making the stand off the
biggest risk to the global economy.
Against the dollar, the yen JPY=EBS fell to 109.595, the
weakest since Dec. 2.
The dollar index .DXY against a basket of six major
currencies fell 0.35% to 96.736, approaching the lowest since
July this year.