* Dollar near 4-week high vs yen but still down on month
* U.S. currency supported by month-end rebalancing
* Euro capped by ECB stimulus hopes
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, Aug 30 (Reuters) - The dollar held firm against the
yen on Friday, as comments from Beijing sparked renewed hopes
that China and the United States could get full-fledged
negotiations back on track to resolve their protracted trade
dispute.
The U.S. currency was also supported by investors' month-end
rebalancing needs, which has helped lift the dollar index to
its highest level in a month.
The dollar index =USD rose to as high as 98.554 on
Thursday, a top last seen on Aug. 1, and last stood at 98.439.
Against the yen, the greenback traded at 106.53 yen JPY= ,
flat from late U.S. levels and up 1.1% on the week.
China's commerce ministry said on Thursday Beijing and
Washington were discussing the next round of face-to-face talks
scheduled for September.
U.S. President Donald Trump said some discussions were
taking place on Thursday, ahead of a looming deadline for
additional U.S. tariffs on Sept. 1. The signs of talks were enough to mitigate worries about a
further escalation in bilateral tensions, which intensified last
week after both countries imposed additional tariffs on each
other's goods late last week.
Yet, political risks from UK to Hong Kong and the Middle
East added to the risks for the global economy and kept many
investors on edge.
Despite the dollar's latest rebound against the yen, the
U.S. currency is still down 2.1% on month.
"There are so many geopolitical risk factors now. Not to
mention U.S.-China trade conflicts, we have Brexit, Hong Kong
and the Middle East. So we should expect the yen to jump from
time to time," said Minori Uchida, chief currency analyst at
MUFG Bank.
The Australian dollar, often seen as a proxy bet on the
Chinese economy, stood at $0.67295 AUD=D4 , just about a half
cent above its 10-year low of $0.66775 hit on Aug. 7.
The euro was little changed at $1.1058 EUR= , having hit a
four-week low of $1.1042 in the previous session, hurt by a
sluggish euro zone economy and likely monetary easing from the
European Central Bank (ECB) next month.
Christine Lagarde, the ECB's next president, said on
Thursday the bank still has room to cut interest rates if
needed, although this may pose financial stability risk.
German inflation slowed in August and unemployment rose,
data showed on Thursday, adding to signs that Europe's largest
economy is running out of steam and cementing expectations of a
new ECB stimulus package next month. Sterling traded at $1.2183 GBP=D4 , on course to post its
first weekly loss in three weeks on growing worries about a
no-deal Brexit at the end of October.
British Prime Minister Boris Johnson suspended parliament
for more than a month to dodge a possible no-confidence vote and
take Britain out of the European Union on the Oct. 31 deadline.