October 10, 2018 / 3:28 PM / 7 days ago

FOREX-Hopes for Brexit deal lift euro, sterling

    * Hopes for Brexit deal buoy euro, sterling 
    * Higher U.S. yields fail to boost greenback
    * Norwegian crown the big riser after inflation data
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Oct 10 (Reuters) - The euro and sterling rose on
Wednesday, underpinned by optimism for a Brexit deal, while the
dollar lost ground against a basket of currencies even as U.S.
bond yields hovered at multiyear peaks.
    The common currency's gains were limited by worries about
the sustainability of Italy's public finances, though Italian
Economy Minister Giovanni Tria reiterated on Wednesday that the
government would do everything in its power to regain the
confidence of financial markets.
    "There is more optimism that they will find some agreement
between Britain and (the) European Union before Brexit," said
Steve Englander, global head of G10 FX research at Standard
Chartered Bank in New York.
    This week, Brexit negotiators have hinted progress toward
terms for Britain to leave the economic bloc in March, which
gave investors hope for an orderly departure. Still, caution
persists due to scant details.
    On Wednesday, EU's Brexit negotiator, Michel Barnier, said
the two parties have agreed on much of the withdrawal agreement
ahead of a summit of all the bloc's 28 national leaders next
week.
    The pound reached a two-week high at $1.3210 Wednesday and
held a gain of 0.46 percent on the day. It hit its strongest
level against the euro since June 15 at 87.23 pence.
    The euro rose 0.34 percent to $1.15315 and 0.17 percent to 
130.035 yen.
    The bounce in the two currencies offset an increase in U.S.
Treasury yields, putting pressure on the dollar.
    Benchmark 10-year yield retreated from a
seven-year high of 3.261 percent set on Tuesday, even as
investors reduced their bond holdings in advance of $36 billion
3-year and $23 billion 10-year note auctions later Wednesday.
    U.S. yields have increased on rising government debt supply
and worries about higher inflation, which may push the Federal
Reserve to raise short-term rates more quickly. 
    The ICE dollar index, which tracks the greenback
against six major currencies, fell 0.24 percent on the day to
95.437. It hit a seven-week high on Tuesday at 96.155.
    Among other major currencies, the Norwegian crown gained
0.83 percent against the dollar to 8.1970 crowns, and
rose 0.51 percent versus the euro to 9.4522 crowns, after
Norway's inflation rate rose more than expected in September
. 
========================================================
    Currency bid prices at 10:55AM (1455 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1530        $1.1489     +0.36%         -3.88%      +1.1534     +1.1480
 Dollar/Yen       JPY=        112.7600       112.9400    -0.16%         +0.08%      +113.2800   +112.7500
 Euro/Yen         EURJPY=     130.02         129.78      +0.18%         -3.82%      +130.4900   +129.8000
 Dollar/Swiss     CHF=        0.9900         0.9917      -0.17%         +1.61%      +0.9933     +0.9897
 Sterling/Dollar  GBP=        1.3203         1.3142      +0.46%         -2.29%      +1.3209     +1.3136
 Dollar/Canadian  CAD=        1.2974         1.2945      +0.22%         +3.16%      +1.2986     +1.2926
 Australian/Doll  AUD=        0.7099         0.7102      -0.04%         -9.00%      +0.7130     +0.7088
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1414         1.1396      +0.16%         -2.35%      +1.1436     +1.1391
 Euro/Sterling    EURGBP=     0.8729         0.8741      -0.14%         -1.73%      +0.8754     +0.8724
 NZ Dollar/Dolar  NZD=        0.6476         0.6472      +0.06%         -8.61%      +0.6496     +0.6455
 Dollar/Norway    NOK=        8.1963         8.2656      -0.84%         -0.13%      +8.2685     +8.1913
 Euro/Norway      EURNOK=     9.4522         9.5005      -0.51%         -4.02%      +9.5096     +9.4400
 Dollar/Sweden    SEK=        9.1011         9.1036      +0.30%         +10.97%     +9.1192     +9.0789
 Euro/Sweden      EURSEK=     10.4944        10.4628     +0.30%         +6.66%      +10.5090    +10.4365
    

 (Additional reporting by Tommy Wilkes in London
Editing by Angus MacSwan and Jonathan Oatis)
  
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