FOREX-Yuan, dollar gain and safe-haven currencies shrivel after U.S.-China trade truce

* Trump, Xi agree to restart trade talks on the weekend
* Risk assets rally, safe-haven yen, franc fall
* Offshore yuan nears 2-month high, data tempers gains
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds new quote, details, updates prices)
By Tommy Wilkes
LONDON, July 1 (Reuters) - The dollar and offshore Chinese
yuan rallied on Monday after the United States and China agreed
to restart their troubled trade talks, while the Japanese yen
and Swiss franc were the big casualties as investors sold
safe-haven currencies.
While reports of an agreement had been flagged ahead of U.S.
President Donald Trump and his Chinese counterparty Xi Jinping's
meeting on the sidelines of the G20 meeting, the outcome was
more positive than investors had expected.
Trump said he would hold back on new tariffs and that China
will buy more farm products, and he offered to ease restrictions
on tech company Huawei. Global stocks jumped and investors dumped safe-haven assets.
China's offshore yuan rose more than 0.5% to as high as
6.8165 yuan per dollar, near a two-month high, before easing
back to 6.8476 after disappointing factory activity data.
The dollar, which has fallen in recent weeks on rising
expectations for Federal Reserve interest rate cuts, rose 0.4%
against a basket of currencies, its index hitting 96.611 .DXY
and the highest since June 21.
Versus the euro the greenback rose 0.4% to $1.1327
EUR=EBS .
"The compromise reached between Trump and Xi at the week's
G20 meeting went further than most had expected, with Trump
putting the next tranche of tariffs on hold and reopening US
companies' ability to supply Huawei," said RBC's currency
strategist Adam Cole.
However, he cautioned that there remained "plenty of scope
for trade talks to break down again in the future."
The Japanese yen, which investors tend to buy when they are
looking for safety, dropped 0.6% to as low as 108.53 JPY=EBS ,
its weakest since June 19, before settling at 108.31.
The Swiss franc EURCHF=EBS lost 0.4% versus the euro to
1.1142 francs. It also slumped 0.7% against the dollar CHF=EBS
to $0.9833.
The Australian dollar AUD=D3 , sensitive to the economic
fortunes of China, the country's largest trading partner,
dropped 0.4% at $0.6995, with the weaker-than-expected factory
data out of China overshadowing the trade ceasefire.
Sterling slipped 0.5% to $1.2638 GBP=D3 , hurt by the broad
dollar rally and after a survey showed Britain's manufacturers
suffering their sharpest fall in activity in more than six years
in June. This week sees the release of crucial U.S. economic data
including non-farm payrolls on Friday and non-manufacturing
activity on Wednesday, which should help investors better assess
whether the Federal Reserve will cut interest rates later this
month.
"Economic data will clearly have a more important role this
week, and we can't help but think that Friday's US employment
overview will be a defining moment for July Fed rate
expectations," said BMO Capital Markets FX strategist Stephen
Gallo.

(Editing by Toby Chopra and Raissa Kasolowsky)