November 7, 2019 / 3:47 PM / 3 months ago

FOREX-Dollar gains vs yen, Swiss franc on continued trade deal optimism

    * Mild risk-on sentiment seen across major currencies
    * China spokesman boosts trade deal hopes
    * Dollar gains versus yen; safe-haven currencies suffer
    * Sterling falls vs dollar on BoE decision
    * Graphic: World FX rates in 2019

 (Recasts, adds new comment, sterling moves, FX table, updates prices, changes byline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Nov 7 (Reuters) - The dollar gained against the safe-haven yen and Swiss franc on Thursday,
bolstered by comments from a Chinese commerce ministry official that suggested the world's two largest
economies are inching closer to a trade deal.
    The Chinese commerce ministry said on Thursday Beijing and Washington have agreed to cancel in phases
the tariffs imposed during their months-long trade war, but specified no timetable.
    The proportion of tariffs canceled for both sides to reach a "phase one" deal must be the same, but
the number to be canceled can be negotiated, he said.
    The dollar rose to near three-month highs versus the yen after the news, retracing its 0.3% losses
earlier in the session, as investors interpreted the comments as positive news. It was last up 0.2% at
109.19 yen. 
    The dollar also gained against another safe haven, the Swiss franc, trading up 0.2% at 0.9946 franc
    Investors tend to sell the yen and Swiss franc in times of improved risk sentiment.
    Some analysts, though, cautioned about reading too much into China's comments.
    "It's a very mild risk-on day. The Chinese news has already been factored in and markets are very
tentative pricing in headlines that don't necessarily add much," said Simon Harvey, FX market strategist,
at Monex Europe in London.
    "We have already filtered through the Phase One deal. We have already filtered through the
de-escalation of tariffs. You see these headlines, but nothing really has been put in the diary," he
    Hopes for a trade deal had been waning after a senior official of the Trump administration told
Reuters on Wednesday a meeting to sign the deal could be delayed until December and that a venue had not
yet been agreed.
    The Australian and New Zealand dollars - proxies for risk which had been weakening due to uncertainty
surrounding the possible trade deal - also gained on the comments with the Aussie up 0.3% versus the
dollar at US$0.6902..
    Against a basket of currencies, the dollar was slightly higher at 98.075.
    The euro was down at 0.2% against the dollar at $1.1051, having hit three-week lows earlier in
the session.
    The pound, meanwhile, fell to two-week lows against the dollar and was last down 0.3% at $1.2820
 after two Bank of England officials unexpectedly voted to lower interest rates on Thursday to ward
off an economic slowdown. 
    The BoE did keep the bank rate steady at 0.75%, but other bank officials including Governor Mark
Carney said they would consider a cut if global and Brexit headwinds do not ease.
    "The BoE's "mixed messaging suggests that the bar remains quite high for sterling to register a large
and sustained move on the back of today's decision," TD Securities said in a research note.
    But it added that sterling is likely to remain rangebound against the dollar over the next few weeks,
with investors focused on the UK general election on Dec. 12.
    Currency bid prices at 10:35AM (1535 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1047        $1.1065     -0.16%         -3.68%      +1.1091     +1.1049
 Dollar/Yen       JPY=        109.2000       108.9600    +0.22%         -0.96%      +109.2200   +108.6600
 Euro/Yen         EURJPY=     120.65         120.58      +0.06%         -4.41%      +121.1100   +120.1400
 Dollar/Swiss     CHF=        0.9949         0.9926      +0.23%         +1.38%      +0.9951     +0.9912
 Sterling/Dollar  GBP=        1.2816         1.2850      -0.26%         +0.46%      +1.2877     +1.2795
 Dollar/Canadian  CAD=        1.3179         1.3180      -0.01%         -3.36%      +1.3199     +1.3158
 Australian/Doll  AUD=        0.6896         0.6882      +0.20%         -2.17%      +0.6911     +0.6863
 Euro/Swiss       EURCHF=     1.0992         1.0985      +0.06%         -2.33%      +1.1008     +1.0976
 Euro/Sterling    EURGBP=     0.8618         0.8609      +0.10%         -4.07%      +0.8658     +0.8603
 NZ               NZD=        0.6355         0.6367      -0.19%         -5.30%      +0.6386     +0.6348
 Dollar/Norway    NOK=        9.1054         9.1704      -0.71%         +5.41%      +9.1866     +9.0802
 Euro/Norway      EURNOK=     10.0602        10.1481     -0.87%         +1.56%      +10.1580    +10.0590
 Dollar/Sweden    SEK=        9.6092         9.6252      -0.30%         +7.20%      +9.6413     +9.5788
 Euro/Sweden      EURSEK=     10.6180        10.6501     -0.30%         +3.45%      +10.6610    +10.6107
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Elizabeth Howcroft in London; Editing by
Jonathan Oatis)
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