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FOREX-Kiwi leads faint risk rally, Brexit promise lifts sterling

Published 25/11/2019, 06:06
© Reuters.  FOREX-Kiwi leads faint risk rally, Brexit promise lifts sterling
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* Chinese plans for IP reform seen as positive step on trade

front

* Aussie, kiwi rise modestly as yen retreats

* Sterling buoyed by Brexit push in Conservative manifesto

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

By Tom Westbrook

SINGAPORE, Nov 25 (Reuters) - The dollar and export-focused

currencies found support on Monday as positive signs for the

U.S. economy and upbeat headlines on U.S.-China trade talks

boosted investor confidence.

The pound climbed, too, on hopes for an imminent Brexit and

an end to years of political paralysis.

The day's mood - tempered with weariness at the flow of

trade news - was best illustrated by the New Zealand dollar. It

rose 0.4% against the safe-haven Japanese yen NZDJPY= to 69.83

"Even if the numbers are small, there's a message in there

that risk appetite has improved," said Westpac FX strategist

Sean Callow.

The dollar added 0.1% on the yen JPY= to 108.76 yen and

touched its highest level since Nov. 14 against the euro EUR=

at $1.1012. It sat at 98.278 against a basket of currencies,

just below a two-week high .DXY .

Sterling GBP= rose 0.1% to $1.2847, after British Prime

Minister Boris Johnson, whose Conservative Party leads in

opinion polls ahead of the Dec. 12 election, promised to bring a

deal to leave the European Union to parliament before Christmas.

"The markets are holding on to any sort of positivity we get

at the moment," said Sean MacLean, research strategist at

Pepperstone, a brokerage in Melbourne. "We want to keep that

momentum going."

Keeping hopes for a breakthrough in trade talks alive was

the weekend announcement of Chinese plans for improving

protection of intellectual property rights - seen as a move to

address a sticking point between the parties. U.S. national security adviser Robert O'Brien also said on

Saturday a deal was possible by year's end.

On the economic front, the greenback was buttressed by

better-than-expected U.S. manufacturing data on Friday, seen as

staving off the need for a rate cut. The main check on

confidence has been rising tensions over Hong Kong.

The city has been rocked by more than five months of

anti-government protests, and Beijing has already reacted

angrily to the passage of U.S. legislation backing protesters,

which has cleared Congress but not been endorsed by President

Donald Trump.

"The price of the 'Hong Kong bill' will be increased

underlying U.S.-China tensions," said Vishnu Varathan, head of

economics and strategy at Mizuho Bank in Singapore, adding that

means greater uncertainty around the trade deal.

Nevertheless, the day's optimistic sentiment was enough to

lift the trade-exposed Australian dollar AUD=D3 0.2% higher on

the greenback to $0.6796, and for the New Zealand dollar

NZD=D3 to gain 0.3% to $0.6421.

China's yuan CNY= strengthened slightly to 7.0356.

Later in the trading day focus is expected to shift to

German service-sector data and a speech from the European

Central Bank's Chief Economist Philip Lane at 1800 GMT.

U.S. Federal Reserve Chairman Jerome Powell's makes a speech

at 0000 GMT.

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