March 4, 2019 / 4:19 PM / 3 months ago

FOREX-Dollar strengthens on hopes for U.S.-China trade deal

    * Dollar firms on optimism on U.S.-China trade deal
    * But Trump knocks Fed Chairman Powell, strong dollar 
    * Euro slips ahead of expected dovish ECB message
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 4 (Reuters) - The dollar rose against a
basket of major currencies on Monday on traders' bets that China
and the United States are moving closer to a trade deal that
would end sparring between the world's two biggest economies.
    The greenback gained for a fourth straight day, bolstered by
the rise in U.S. bond yields with benchmark 10-year yields
 hitting one-month peaks last week.
    The gap between benchmark 10-year yields in the United
States and Germany has widened to 257 basis
points from 240 basis points at the beginning of the year. 
    The United States and China appeared to be close to a deal 
that would roll back U.S. tariffs on at least $200 billion worth
of Chinese imports, a source briefed on negotiations said on
Sunday, but the timing and details for a deal remained unclear.

    "Constructive reports on U.S.-China trade fueled optimism
that the world’s two biggest economies might be weeks away from
a formal breakthrough," Joe Manimbo, senior market analyst at
Western Union Business Solutions in Washington.
    At 11:05 a.m. (1605 GMT), the ICE dollar index was up
0.24 percent at 96.756.
    The Chinese yuan edged up 0.1 percent to 6.7089 to the
dollar in offshore trade, close to last week's 7
1/2-month high of 6.6737. 
    The euro was notably weaker against the greenback, falling
0.39 percent at 1.1324.
    Some analysts now expect a fresh round of bank funding at a
European Central Bank meeting later this week that would boost
the dollar.
    "With so much dovishness priced before the ECB meeting this
week, Draghi will struggle to exceed market expectations and
this may help the euro," said Valentin Marinov, head of G10 FX
research at Credit Agricole based in London.        
    The dollar's increase came after comments from U.S.
President Donald Trump who on Saturday renewed his criticism of
Federal Reserve Chairman Jerome Powell. 
    Trump blamed the central bank's current monetary stance for
boosting the dollar, which he believes is hurting U.S. exports. 

    The greenback was hovering near a 10-week high of 112.08 yen
 reached on Friday. It was last at 111.805 yen,
marginally lower on the day.
    Speculators increased their bullish dollar bets in
mid-February to their highest level in four weeks, Commodity
Futures Trading Commission data released on Friday showed.

========================================================
    Currency bid prices at 11:03AM (1603 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1320        $1.1374     -0.47%         -1.30%      +1.1395     +1.1310
 Dollar/Yen       JPY=        111.8000       111.9000    -0.09%         +1.41%      +112.0100   +111.7300
 Euro/Yen         EURJPY=     126.58         127.20      -0.49%         +0.29%      +127.4100   +126.5900
 Dollar/Swiss     CHF=        0.9998         0.9988      +0.10%         +1.87%      +1.0020     +0.9976
 Sterling/Dollar  GBP=        1.3172         1.3202      -0.23%         +3.25%      +1.3273     +1.3168
 Dollar/Canadian  CAD=        1.3323         1.3295      +0.21%         -2.30%      +1.3327     +1.3275
 Australian/Doll  AUD=        0.7083         0.7080      +0.04%         +0.48%      +0.7118     +0.7076
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1321         1.1351      -0.26%         +0.58%      +1.1367     +1.1317
 Euro/Sterling    EURGBP=     0.8593         0.8605      -0.14%         -4.35%      +0.8600     +0.8559
 NZ               NZD=        0.6797         0.6799      -0.03%         +1.19%      +0.6832     +0.6797
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.6477         8.5793      +0.80%         +0.10%      +8.6567     +8.5545
 Euro/Norway      EURNOK=     9.7917         9.7555      +0.37%         -1.15%      +9.7986     +9.7383
 Dollar/Sweden    SEK=        9.3396         9.2693      +0.37%         +4.19%      +9.3456     +9.2477
 Euro/Sweden      EURSEK=     10.5733        10.5347     +0.37%         +3.01%      +10.5794    +10.5226
 
    
 (Additional reporting by Saikat Chatterjee in LONDON
Editing by Mark Heinrich and Susan Thomas)
  
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