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FOREX-Fresh trade deal hopes gently lift dollar, Aussie

Published 15/11/2019, 05:53
FOREX-Fresh trade deal hopes gently lift dollar, Aussie
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* White House adviser sounds positive on deal progress

* Yen eases, riskier currencies lift

* Moves slight as investors await details

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

By Tom Westbrook

SINGAPORE, Nov 15 (Reuters) - The dollar and riskier

trade-exposed currencies found some support on Friday as fresh

hopes for a breakthrough in Sino-U.S. trade talks were tempered

with caution.

White House economic adviser Larry Kudlow said late on

Thursday that the two parties were getting close to a deal and

the "mood music is pretty good". He offered no new details, but the sentiment was enough to

reverse a little of the safe-haven Japanese yen's overnight gain

and to buoy the Australian and New Zealand dollars.

The yen JPY= fell 0.2% to 108.57 per dollar and dropped

0.3% on the rising Aussie.

The Australian dollar AUD=D3 , which had tumbled on

Thursday after an unexpected rise in the national unemployment

rate, added 0.2% to $0.6795.

The New Zealand dollar NZD=D3 rose 0.1% to $0.6388.

China's yuan CNY= rose 0.2% but remained just shy of

strengthening past the 7-per-dollar level at 7.0076.

Against a basket of six major currencies .DXY the

greenback was steady at 98.140 as caution and the lack of

concrete news in Kudlow's remarks kept a lid on risk appetite.

"It may not be a game-changer," said Terence Wu, a treasury

strategist at OCBC Bank in Singapore. "Thus, we think any

reversal in the risk-off trades may not see a good shelf-life."

Mixed signals on trade negotiations have abounded in recent

days while evidence of the damage the dispute is wreaking on the

global economy has mounted.

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.

On Thursday, China's commerce ministry said the two

countries are holding "in-depth" discussions, while U.S.

President Donald Trump said on Tuesday a deal was close.

But 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.

Sub-par growth figures on Thursday from China and Japan,

followed by lacklustre updates in Britain and Europe underlined

the potential downside if a deal falters.

Few are game to make a decisive call either way.

"Until we've got the word from Donald Trump, no-one's really

willing to get in front of it," said Jason Wong, senior market

strategist at BNZ in Wellington.

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 the Brexit impasse will finally end.

The pound stood at $1.2880 and at 0.8559 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.

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