January 15, 2020 / 7:41 PM / 10 days ago

FOREX-Dollar weakens as U.S., China sign trade deal

    * U.S., China sign preliminary trade deal 
    * UK inflation weaker than expected

 (Adds U.S., China trade agreement, updates prices)
    By Karen Brettell
    NEW YORK, Jan 15 (Reuters) - The dollar pared losses but
remained lower against the euro and the yen on Wednesday after
the United States and China signed a deal to de-escalate their
trade war.
    The two countries announced an initial trade deal on
Wednesday that will roll back some tariffs and boost Chinese
purchases of U.S. goods and services, defusing an 18-month
conflict between the world's two largest economies.
    But the deal will leave in place 25% tariffs on a vast, $250
billion array of Chinese industrial goods and components used by
U.S. manufacturers.
    There is "not much of a reaction at all to the trade deal
signing," said Shaun Osborne, chief fx strategist at Scotiabank
in Toronto.
    It may be a mild negative going forward for the greenback,
however.
    "The dollar has done relatively well out of the uncertainty
element that this protracted trade war has caused," Osborne
said. "So, at the margin we think it’s a dollar negative."
    The euro was last up 0.22% against the greenback
at$1.1151. The dollar dropped 0.05% against the yen to
109.91, after the Japanese currency on Tuesday hit its weakest
level since May at 110.20.
    Sterling edged higher, reversing earlier losses after
data showed UK inflation rose at its slowest in three years,
feeding expectations the Bank of England would cut rates in
January.
    “Directionally the market expected some weakness, but
probably the magnitude surprised,” said Vassili Serebriakov, an
fx strategist at UBS in New York.
    The Swiss franc gained to its strongest against the
dollar in over a year, and its highest against the euro
 in almost three years, after the United States on
Monday added Switzerland to its watchlist of currency
manipulators.
    Analysts said the inclusion could discourage the Swiss
National Bank (SNB) from intervening to try to limit further
appreciation of the franc, although the Swiss finance ministry
said it would have no immediate consequences.
    The Russian rouble weakened after the resignation of Prime
Minister Dmitry Medvedev's government.
    
    ========================================================
    Currency bid prices at 2:17PM (1917 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1151        $1.1127     +0.22%         -0.53%      +1.1163     +1.1119
 Dollar/Yen       JPY=        109.9100       109.9700    -0.05%         +0.96%      +110.0100   +109.8000
 Euro/Yen         EURJPY=     122.55         122.39      +0.13%         +0.49%      +122.7100   +122.2100
 Dollar/Swiss     CHF=        0.9635         0.9672      -0.38%         -0.44%      +0.9680     +0.9631
 Sterling/Dollar  GBP=        1.3025         1.3017      +0.06%         -1.76%      +1.3042     +1.2988
 Dollar/Canadian  CAD=        1.3045         1.3060      -0.11%         +0.45%      +1.3078     +1.3035
 Australian/Doll  AUD=        0.6901         0.6900      +0.01%         -1.71%      +0.6916     +0.6878
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0748         1.0765      -0.16%         -0.96%      +1.0776     +1.0743
 Euro/Sterling    EURGBP=     0.8558         0.8549      +0.11%         +1.23%      +0.8578     +0.8538
 NZ               NZD=        0.6610         0.6613      -0.05%         -1.87%      +0.6620     +0.6585
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.8620         8.8714      -0.11%         +0.95%      +8.8959     +8.8512
 Euro/Norway      EURNOK=     9.8825         9.8720      +0.11%         +0.45%      +9.9010     +9.8733
 Dollar/Sweden    SEK=        9.4580         9.4632      +0.18%         +1.18%      +9.4860     +9.4421
 Euro/Sweden      EURSEK=     10.5493        10.5308     +0.18%         +0.77%      +10.5648    +10.5310
 
    

 (Editing by David Gregorio and Marguerita Choy)
  
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