* Dollar whacked by trade tensions and weak U.S. data
* Yuan hits weakest since late October
* Aussie extends rebound after RBA keeps rates on hold
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Recasts after Trump comments, adds new quote, latest prices)
By Tommy Wilkes
LONDON, Dec 3 (Reuters) - China's offshore yuan fell to its
weakest since October on Tuesday while the Japanese yen and
Swiss franc rallied after U.S. President Donald Trump said a
trade deal with China might have to wait until after the 2020
U.S. presidential election.
The surprise announcement hit the U.S. dollar more broadly
as investors dumped a currency that has tended to rise when
optimism over a trade deal has grown.
Trump said he had no deadline on agreement with Beijing,
sparking a selloff in shares. "It was a classic dollar/yen move down, the risk aversion
that you would expect," said Adam Cole, an FX strategist at RBC
Capital Markets.
Cole said it was unclear what Trump meant and if he was
speaking about a "phase one" agreement announced in October or
the entire deal, but either way it was negative for risk assets.
China's offshore yuan was the biggest initial casualty, with
the dollar rising 0.4 percent to 7.0695 CNH=EBS yuan, the
greenback's strongest against the Chinese currency since Oct.
The yen, earlier down on the day, strengthened 0.1 percent
to 108.81 yen per dollar JPY=EBS , away from a six-month low of
109.73 hit on Monday.
The Swiss franc, another safe-haven currency investors tend
to buy in times of nervousness, rallied 0.3 percent to 1.0954
against the euro EURCHF=EBS .
The dollar fell against a basket of currencies, its index
down 0.1 percent at 97.792 .DXY , while it was little changed
against the euro at $1.1077 EUR=EBS .
Moves in currency markets were broadly contained, however,
with volatility remaining low and investors not appearing to
take much fright.
News of U.S. tariffs on imports of metals from Argentina and
Brazil on Monday and the threat of more tariffs on a range of
European goods had already fed into a stronger yen and weaker
dollar. "Nonetheless uncertainty has no doubt risen again as to what
will happen in mid-December now that everything seems possible
again between the two opponents," Commerzbank analysts said in a
note, referring to a deadline when the U.S. is set to apply more
tariffs on Chinese imports.
Also of concern for the dollar's fortunes was Monday's weak
manufacturing reading for the U.S. economy, analysts said.
The U.S. Institute for Supply Management said its index of
national factory activity fell 0.2 points to a below-forecast
48.1 in November. Separate data showed construction spending
fell in October as investment in private projects tumbled.
The readings surprised economists who had recently raised
U.S. growth forecasts for the fourth quarter.
The Australian dollar, which is very sensitive to the global
growth outlook given its large export dependence on China, hit a
three-week high after the Reserve Bank of Australia's decision
to keep interest rates on hold.
The Aussie surged on Monday on better-than-expected economic
survey data in China. The currency was last up 0.4 percent at
$0.6848 AUD=D3 , while the New Zealand dollar also made solid
gains NZD=D3 .
Sterling rallied 0.4 percent against the dollar GBP=D3 and
the euro EURGBP=D3 as the latest poll showed an increase in
the Conservative Party's lead over the opposition Labour Party
ahead of an election.
U.S. dollar vs offshore Chinese yuan https://tmsnrt.rs/2P9oKW1
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(Editing by Kirsten Donovan and Andrew Cawthorne)