April 3, 2018 / 2:43 PM / 8 months ago

FOREX-Dollar gains as risk appetite improves, but outlook remains weak

    * Dollar recovers after earlier falls
    * Euro slips after euro zone PMIs published
    * Focus on U.S. jobs report and Fed's Powell remarks this
week
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Recasts, adds comment, FX table, updates prices, changes
byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 3 (Reuters) - The dollar rose on Tuesday,
led by gains against the yen and Swiss franc, as risk appetite
improved and Wall Street's main indexes advanced, helping the
currency stabilize after sharp declines the previous day. 
    The outlook for the dollar, however, remains murky due to 
global trade tensions. The greenback has lost 2 percent in the
year so far.
    "At the moment, support from high expectations for further
monetary policy tightening from the Federal Reserve has been
offset by ongoing political pressures and global trade
uncertainties," Fawad Razaqzada, market analyst at Forex.com in
London, said.
    China on Sunday announced tariffs on $3 billion in imports
of U.S. food and other goods in response to U.S. tariffs on
imports of aluminum and steel, a skirmish that investors fear is
a prelude to a broader trade war.
    The Trump administration is expected to announce this week 
U.S. tariffs on $50 billion to $60 billion in Chinese imports.
On Tuesday China's ambassador to the United States said Beijing
will take counter-measures of the "same proportion" and scale if
Washington imposes further tariffs.
    In mid-morning trading, the dollar rose 0.2 percent against
a basket of currencies to 90.218.
    Analysts said investors were also focused on U.S. payrolls
data and comments by Fed Chairman Jerome Powell at the end of
the week, which should help determine the short-term direction
of the dollar. 
     Against the yen, which tends to benefit in times of
economic uncertainty, the dollar snapped three days of losses to
trade 0.5 percent higher at 106.43 yen.
     Traders though are still betting on a stronger yen and a
broadly weakened dollar if the trade tensions escalate.
    "U.S. protectionist measures implicitly signal the
administration's desire for a weaker dollar – and such
expectations are likely to be entrenched in FX markets until
credibly broken," said Viraj Patel, currency analyst at ING in
London. 
    The dollar also advanced versus another safe haven, the
Swiss franc, rising 0.3 percent to 0.9584 franc.
    The euro tumbled after a survey showed the euro zone's
manufacturing boom faltered for a third month in March, although
output remained robust.
    The euro was last down 0.3 percent at $1.2258.
    The Australian dollar, meanwhile, rose 0.4 percent to     
US$0.7685 versus the dollar, above a three-month low set
last week. The currency reacted little to the Reserve Bank of
Australia's decision to keep its cash rate at a record low 1.5
percent as expected on Tuesday.
    
    ========================================================
    Currency bid prices at 10:14AM (1414 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2256        $1.2300     -0.36%         +2.17%      +1.2335     +1.2255
 Dollar/Yen       JPY=        106.3900       105.8800    +0.48%         -5.57%      +106.5700   +105.7000
 Euro/Yen         EURJPY=     130.40         130.24      +0.12%         -3.54%      +130.9100   +130.0000
 Dollar/Swiss     CHF=        0.9587         0.9552      +0.37%         -1.60%      +0.9591     +0.9533
 Sterling/Dollar  GBP=        1.4039         1.4043      -0.03%         +3.90%      +1.4089     +1.4022
 Dollar/Canadian  CAD=        1.2843         1.2910      -0.52%         +2.12%      +1.2923     +1.2823
 Australian/Doll  AUD=        0.7670         0.7662      +0.10%         -1.68%      +0.7707     +0.7653
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1753         1.1750      +0.03%         +0.55%      +1.1775     +1.1741
 Euro/Sterling    EURGBP=     0.8729         0.8760      -0.35%         -1.73%      +0.8764     +0.8727
 NZ               NZD=        0.7247         0.7211      +0.50%         +2.27%      +0.7270     +0.7196
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        7.8383         7.8868      -0.61%         -4.49%      +7.8965     +7.8205
 Euro/Norway      EURNOK=     9.6077         9.7053      -1.01%         -2.45%      +9.7158     +9.5970
 Dollar/Sweden    SEK=        8.3892         8.3900      -0.37%         +2.29%      +8.4008     +8.3582
 Euro/Sweden      EURSEK=     10.2835        10.3216     -0.37%         +4.51%      +10.3470    +10.2720
 
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tommy Wilkes in London
Editing by Susan Thomas)
  
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