(Rewrites to update prices, add analyst comment, changes
byline, dateline; previous LONDON)
* Trump/Xi meeting in focus, with trade, FX likely on agenda
* Yen hits 4-month high vs euro on risk-off sentiment
* Dollar/yen hits week's low
* Aussie slips on RBA views on labour and inflation
By Gertrude Chavez-Dreyfuss
NEW YORK, April 4 The safe-haven yen rose to a
one-week high against the dollar and a 4-1/2 month peak versus
the euro on Tuesday, as investors grew cautious about a possibly
contentious meeting between U.S. President Donald Trump and
Chinese President Xi Jinping.
Trump vowed during his campaign to label China a currency
manipulator on his first day in office.
While that has not happened, a CNBC report last week said
the Trump administration was reviewing the scope of its power to
penalize countries whose currencies it perceives as undervalued.
The report provided no details about how that would be done.
"In terms of U.S. trade policy and the Trump/Xi meeting,
it's always difficult to know what components of FX the two will
focus on or what specific measure they will be looking at in
order to amp up the rhetoric on currency manipulator," said Brad
Bechtel, managing director FX at Jefferies in New York.
He added that it was "unclear if it will even come up this
week at all given it's more of a Treasury function to call these
things than it is a presidential function."
Markets also reacted to a bombing on Monday in a St.
Petersburg metro, had an eye on U.S. employment data this week
and France’s presidential election later this month.
In late morning trading, the dollar fell 0.4 percent to
110.49 yen, after earlier sliding to a one-week low of
Tuesday's data was largely positive for the dollar. The U.S.
trade deficit in February narrowed more than expected to $43.6
billion in February, a number that could boost first-quarter
U.S. factory orders in February also rose 0.1 percent,
expanding for a third straight month.
The euro, meanwhile, dropped against the yen, off 0.5
percent at 117.78 yen. Earlier, the euro fell as low as 117.43,
the lowest since Nov. 22.
Japan's main Nikkei stock index, which tends to move
inversely to the yen, closed down 0.9 percent to a 10-week low.
The euro fell to a three-week trough earlier and was
last at $1.0657, down 0.1 percent.
Meanwhile, the Reserve Bank of Australia's decision to keep
interest rates at a record low of 1.5 percent was a surprise.
But the Aussie dollar fell after the RBA hinted it was not too
confident about domestic labor and inflation conditions.
The Aussie hit a three-week low of U$0.7545, having
declined steadily over the past two weeks from a four-month high
(Reporting by Gertrude Chavez-Dreyfuss in New York and Ritvik
Carvalho in London; editing by Alexander Smith and Grant McCool)