August 8, 2019 / 2:05 PM / 15 days ago

FOREX-Dollar, yuan stronger as risk sentiment improves

    * Chinese data, yuan fixing boosts risk sentiment
    * Euro briefly bid on report Germany to issue new debt

 (New throughout, updates trading and comments to U.S. market
open, previous LONDON)
    By Karen Brettell
    NEW YORK, Aug 8 (Reuters) - The dollar index inched higher
on Thursday and the Chinese currency strengthened after the
Chinese central bank fixed the yuan at a stronger level than
expected, boosting risk appetite.
    The People's Bank of China (PBOC) set the midpoint
rate at 7.0039. The fixing was still the weakest in
more than a decade, however.
    "Last night fixed over 7 and markets seem to be taking that
fairly well, so perhaps some calm is installed in the market at
least for the very near term," said Mazen Issa, senior FX
strategist at TD Securities in New York.
    Data showing a surprise increase in Chinese exports in July
from a year earlier added to the improving sentiment. 

    The dollar fell 0.19% against the offshore yuan to
7.0681. The dollar index against a basket of currencies
gained 0.07% to 97.614.
    On Monday, China allowed its currency to weaken past 7 per
dollar for the first time since 2008, sparking broad risk
aversion on concerns that the U.S.-China trade war was
escalating.
    The move came in response to U.S. President Donald Trump's
announcement last week that he would impose more tariffs on
Chinese goods. Washington labeled Beijing a currency manipulator
on Monday.
    Trade tensions are likely to continue to weigh on the
Chinese currency and risk appetite, with no resolution to the
U.S.-China dispute in sight.
    Increasingly dovish central bank policies are also adding to
nerves that the global economic outlook may be worse than feared
- central banks in New Zealand, India and Thailand all cut rates
on Wednesday.
    "The risk of these central banks trying to out-dove one
another is, the more they do, the more they instill panic into
market participants that this is worse than expected,” Issa
said.
    The euro jumped briefly on Thursday after Reuters reported
that Germany is considering ditching its long-cherished balanced
budget goal by issuing new debt to finance a costly climate
protection package.
    The single currency has been boosted in recent days by the
unwind of emerging market carry trades that were funded in
euros.
    
    ========================================================
    Currency bid prices at 9:40AM (1340 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1202        $1.1197     +0.04%         -2.33%      +1.1228     +1.1182
 Dollar/Yen       JPY=        106.1000       106.2600    -0.15%         -3.77%      +106.2900   +105.9200
 Euro/Yen         EURJPY=     118.87         118.99      -0.10%         -5.82%      +119.1500   +118.5600
 Dollar/Swiss     CHF=        0.9774         0.9752      +0.23%         -0.41%      +0.9776     +0.9738
 Sterling/Dollar  GBP=        1.2122         1.2140      -0.15%         -4.98%      +1.2182     +1.2097
 Dollar/Canadian  CAD=        1.3288         1.3300      -0.09%         -2.56%      +1.3314     +1.3272
 Australian/Doll  AUD=        0.6797         0.6755      +0.62%         -3.58%      +0.6798     +0.6747
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0950         1.0924      +0.24%         -2.70%      +1.0955     +1.0917
 Euro/Sterling    EURGBP=     0.9238         0.9222      +0.17%         +2.83%      +0.9265     +0.9208
 NZ               NZD=        0.6467         0.6444      +0.36%         -3.72%      +0.6469     +0.6435
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.9433         8.9529      -0.11%         +3.53%      +8.9614     +8.9215
 Euro/Norway      EURNOK=     10.0180        10.0271     -0.09%         +1.13%      +10.0400    +10.0040
 Dollar/Sweden    SEK=        9.5956         9.6372      -0.40%         +7.05%      +9.6386     +9.5856
 Euro/Sweden      EURSEK=     10.7505        10.7934     -0.40%         +4.74%      +10.8011    +10.7459
 
    

 (Editing by Sonya Hepinstall)
  
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