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FOREX-Dollar buoyed by caution as trade deal optimism wanes

Published 15/11/2019, 01:53
© Reuters.  FOREX-Dollar buoyed by caution as trade deal optimism wanes
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* Safe-haven lustre supports yen, dollar

* Investors await details of Sino-U.S. trade deal progress

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Westbrook

SINGAPORE, Nov 15 (Reuters) - The dollar found broad support

on Friday as fresh signs of a global economic slowdown and

little visible progress toward a Sino-U.S. trade truce put

investors in a risk-averse mood.

The latest evidence that the U.S.-China trade war has hurt

the global economy was illustrated by sub-par growth figures on

Thursday from China and Japan, followed by lacklustre updates in

Britain and Europe.

Overnight media reports also suggested negotiations to end

the damaging dispute had stalled.

The Financial Times, citing unidentified people close to the

talks, said an agreement may not be reached in time to avoid a

new round of U.S. tariffs taking effect on Dec. 15. White House economic advisor Larry Kudlow told an event at

the Council on Foreign Relations in Washington late on Thursday

that a deal was "getting close", but offered no new details and

similarly failed to shift the sentiment.

"No news on trade negotiations is becoming bad news," said

CMC Markets' Chief Strategist in Sydney, Michael McCarthy.

The dollar clawed back some of the ground it gave to the

safe-haven yen overnight, rising 0.1% to buy 108.55 yen, and

kept hold of overnight gains against the Australian and New

Zealand dollars.

Against a basket of currencies .DXY , the dollar last

traded at 98.163. The euro EUR= was stable at $1.1020. Moves

were slight as investors looked for concrete news on the trade

front.

"Once that risk event's cleared, it would be a positive

development," said Jason Wong, senior market strategist at BNZ

in Wellington. "But until we've got the word from Donald Trump,

no-one's really willing to get in front of it."

The next scheduled economic updates are Eurozone trade and

inflation data due at 1000 GMT and the New York Fed

manufacturing survey due at 1330 GMT.

Trade news has been scarce. Earlier in the week, Trump

offered bluster but no fresh details in a policy address in New

York.

The British pound, meanwhile, sat near peaks scaled

overnight.

Sterling GBP= touched a six-month high against the euro

and gained on the dollar as expectations that Britain's ruling

Conservative Party might win a majority in a Dec. 12 election

fuelled optimism that the Brexit impasse will finally end.

It stood at $1.2881 and at 0.8555 pence per euro in Asian

trade. "Markets now appear to be priced for a high likelihood of

a majority Conservative government," RBC Chief Currency

Strategist Adam Cole said in a note.

The Australian dollar AUD=D3 nurses losses inflicted by an

unexpected rise in unemployment on Thursday to trade at $0.6786.

The kiwi NZD=D3 was unmoved by Reserve Bank of New Zealand

Governor Adrian Orr telling bankers in San Francisco that New

Zealand was prepared to use unconventional policy tools.

The New Zealand dollar had jumped by a percentage point on

Wednesday when the RBNZ unexpectedly left interest rates on

hold. China's yuan was steady at 7.0167 per dollar in offshore

trade CNH= . Home price data is due (0130 GMT), a day after

readings showed China's main growth engines all faltered more

than expected in October.

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