September 11, 2018 / 2:52 PM / a month ago

FOREX-Dollar gains on renewed U.S.-China trade worries

    * China to request WTO to slap duties on U.S. goods  
    * Euro, sterling stall after rising on hopes for Brexit deal
    * Report on potential Deutsche, Commerzbank merger supports
euro
    * Australian dollar slides to lowest since Feb 2016
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates trading, changes previous dateline from LONDON)
    By Richard Leong
    NEW YORK, Sept 11 (Reuters) - The U.S. dollar edged up
against a basket of major currencies on Tuesday as concerns
about trade friction between China and the United States
prompted some safe-haven buying of the currency.
    China will ask the World Trade Organization (WTO) next week
for permission to impose sanctions on the United States, for
Washington's non-compliance with a ruling in a dispute over U.S.
dumping duties.
    Anxiety over the trade dispute between the world's two
biggest economies outweighed traders' optimism about a possible
agreement on the terms of Britain's exit from the European Union
and reversed some of euro and sterling's gains on Monday.
    The Australian dollar was another casualty of the trade
tension between Beijing and Washington, tumbling to its weakest
level against the greenback since February 2016.
    "The dollar index is in positive territory this morning with
the Aussie caught in the crossfire of trade spat between the
U.S. and China," Viash Sreemuntoo, corporate trader at XE said
in a research note. "Investors continue to take a cautious
approach amidst trade war headlines."
    At 10:27 a.m. (1427 GMT), the dollar index that tracks the
greenback against six major currencies was up 0.06
percent at 95.210. It shed over 0.2 percent on Monday as the
euro and sterling bounced after the European Union chief
negotiator Michel Barnier hinted at a possible Brexit deal.

    The euro was buoyed by a decline in Italian government
borrowing costs after Economy Minister Giovanni Tria on Monday
predicted that yields would drop as the government
lays out its eagerly awaited 2019 budget.      
    The euro initially rose 0.4 percent to $1.16445
before turning lower in early U.S. trading. It later pared those
losses to be little changed on the day at $1.15940 following a
German magazine Der Spiegel report that said the executives of
Deutsche Bank and Commerzbank were growing
more open to the idea of a merger.
    Sterling touched a five-week high against the dollar earlier
Tuesday before fading to $1.2989, down 0.3 percent on
the day, according to Reuters data.
    The Australian dollar was down 0.26 percent to
$0.70940 after hitting its lowest since February 2016 on
concerns that potential damage to the Chinese economy from a
trade war would hurt Australia's exporters.  
    The New Zealand dollar also hovered near a 2-1/2
year low at $0.6505. China's offshore yuan fell 0.2
percent to 6.8673, a 2-1/2 week low. 
========================================================
    Currency bid prices at 10:29AM (1429 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1591        $1.1592     -0.01%         -3.38%      +1.1643     +1.1566
 Dollar/Yen       JPY=        111.5400       111.1100    +0.39%         -1.00%      +111.5600   +111.0700
 Euro/Yen         EURJPY=     129.29         128.83      +0.36%         -4.36%      +129.8000   +128.7800
 Dollar/Swiss     CHF=        0.9736         0.9749      -0.13%         -0.07%      +0.9759     +0.9730
 Sterling/Dollar  GBP=        1.2999         1.3025      -0.20%         -3.80%      +1.3086     +1.2971
 Dollar/Canadian  CAD=        1.3144         1.3162      -0.14%         +4.51%      +1.3174     +1.3131
 Australian/Doll  AUD=        0.7091         0.7114      -0.32%         -9.10%      +0.7128     +0.7086
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1287         1.1302      -0.13%         -3.44%      +1.1343     +1.1264
 Euro/Sterling    EURGBP=     0.8916         0.8898      +0.20%         +0.37%      +0.8937     +0.8880
 NZ Dollar/Dolar  NZD=        0.6503         0.6525      -0.34%         -8.23%      +0.6540     +0.6502
 Dollar/Norway    NOK=        8.3476         8.3878      -0.48%         +1.71%      +8.4012     +8.3412
 Euro/Norway      EURNOK=     9.6785         9.7263      -0.49%         -1.73%      +9.7334     +9.6761
 Dollar/Sweden    SEK=        9.0542         9.0667      -0.16%         +10.39%     +9.0795     +9.0105
 Euro/Sweden      EURSEK=     10.4967        10.5130     -0.16%         +6.68%      +10.5190    +10.4820
    

 (Additional reporting by Tommy Wilkes in LONDON
Editing by Bernadette Baum)
  
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