(Updates prices, adds Cole comment)
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee and Elizabeth Howcroft
LONDON, Oct 29 (Reuters) - The euro was range-bound against
the dollar Tuesday as investors awaited for the outcome of the
Federal Reserve meeting on Wednesday, while risk-oriented
currencies strengthened as hopes for an easing in Sino-U.S.
trade tensions buoyed sentiment.
Underpinning risk appetite in markets, there is heightened
general optimism that Britain won't crash out of the European
Union without a deal and the U.S. Federal Reserve will likely
cut interest rates this week for a third time this year.
The U.S. dollar was "just bouncing around in ranges" ahead
of Wednesday's Fed announcement, said Adam Cole, chief currency
strategist at RBC Capital Markets.
Cole thinks further rate cuts, beyond the one expected on
Wednesday, are overpriced.
"Unless the Fed guidance is explicitly that they're close to
sanctioning another cut then we think that the market
expectation is diminished, then dollar goes up," he said.
The euro was last down 0.1% at $1.1085 EUR=EBS , close to
falling to a 12-day low. Cole expects the euro to be limited to
the $1.1050-$1.1100 range.
Against a basket of currencies, .DXY , the dollar was up
0.1% at 97.84, having risen to a 12-day high of 97.93 earlier.
The Australian dollar climbed for a third consecutive
session against the Swiss franc, reaching a six-week high of
0.6824 AUDCHF= . The currency pair, widely considered to be a
barometer of risk sentiment in the currency markets, has risen
by 2.4% so far this month, its biggest monthly rise since April.
Broader moves were modest, though, as caution tempered the
mood. The New Zealand NZD=D3 and the Canadian dollars CAD=D3
edged slightly higher before erasing some of these gains.
U.S. President Donald Trump said on Monday a trade agreement
with China looked to be ahead of schedule, without detailing the
timing. Washington also said it was studying whether to extend
tariff suspensions due to expire in December. "Global risks remain but have shown signs of subsiding,"
Philip Wee, FX strategist at Singapore's DBS Bank said in a
note.
The British pound, meanwhile, GBP=D3 was flat on the day
around $1.2860 after initial losses were erased when Labour
leader Jeremy Corbyn said he would support an election. The U.K.
parliament is due to debate a new election bill on Tuesday.
Prime Minister Boris Johnson is widely expected to win the
simple majority needed. GBP/
On Monday, Johnson failed to win the 2/3 majority necessary
to call an election. The vote took place after the European
Union agreed to a three-month flexible Brexit delay.
FX market positions https://tmsnrt.rs/32WmaZo
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