June 19, 2018 / 6:59 PM / 8 months ago

FOREX-Dollar, yen gain as Trump fires off more tariff threats

    * China yuan falls to five-month low in offshore market
    * Jittery traders pile into safe-haven yen, Swiss franc
    * Trade war fears pummel commodity, emerging market
    * Euro under pressure, Sintra forum eyed for more ECB rate

 (Updates market action, adds quote, graphic)
    By Richard Leong
    NEW YORK, June 19 (Reuters) - The dollar and yen rose on
Tuesday as traders piled into perceived less risky currencies
after U.S. President Donald Trump threatened to slap more
tariffs on China, fanning a trade dispute between the world's
two biggest economies.
    Trump said he would impose a 10 percent tariff on $200
billion of Chinese goods, following levies on $50 billion worth
of Chinese imports enacted last week.
    China's commerce ministry warned on Tuesday that Beijing
would fight back firmly with "qualitative" and "quantitative"
measures if the United States implements more tariffs. 
    Fears of a trade war that could harm global growth spurred
sales of the Chinese yuan, which fell to a five-month trough in
the offshore market, as well as commodity-linked and emerging
market currencies. 
    Worries about a growing U.S.-China trade spat also sparked a
selloff in stock markets around the world. U.S. equity prices
eventually pared their initial drop, which reduced the yen and
greenback's earlier safe-haven gains.
    "We are seeing the dollar and yen outperforming most of
their peers especially those riskier, high-yielding currencies
and those currencies more affected by disruptions in global
trade," said Omer Esiner, chief market strategist with
Commonwealth Foreign Exchange in Washington.
    The index that tracks the greenback against the euro, yen,
sterling and three other currencies reached 95.296, the
highest since last July. It was last up 0.20 percent at 95.987.
    The yen climbed 0.5 percent at 109.97 yen per dollar,
while it advanced 0.8 percent versus the euro to 127.43 yen
 after hitting its strongest level in over two weeks.
    Among the day's losers, the yuan weakened to 6.4948 to the
dollar in the offshore market, the lowest in five
months, before easing to 6.4800 in late U.S. trading.
    "Of course a far-reaching trade war would be detrimental for
everyone in the end, but mainly the countries whose growth
heavily depends on foreign trade," said Commerzbank currency
strategist Thu Lan Nguyen in Frankfurt.     
    The Australian dollar sagged to a one-year low of
$0.73475 as the trade tension hurt base metal prices.

    The Canadian dollar fell to a one-year low of C$1.3291 on
worries about Canada's own trade feud with the United States.

    Trump said on Tuesday progress was being made in trade talks
between the U.S., Canada and Mexico, but he did not rule out
clinching bilateral deals if a three-way agreement cannot be
    In emerging markets, the South African rand tumbled
to its weakest level in nearly seven months at 13.7895 rand per
    In addition to trade concerns, the euro slumped to a
two-week low of $1.1528 after European Central Bank President
Mario Draghi called for a patient approach to European monetary
policy at a forum in Portugal. 
    The single currency was also under pressure as German
Chancellor Angela Merkel's Bavarian allies may defy her by
implementing a plan to limit immigration at the German border,
which could destabilise her three-month-old coalition.

    Currency bid prices at 2:31PM (1831 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1579        $1.1622     -0.37%         -3.48%      +1.1644     +1.1531
 Dollar/Yen       JPY=        110.0200       110.5400    -0.47%         -2.35%      +110.5700   +109.5600
 Euro/Yen         EURJPY=     127.41         128.48      -0.83%         -5.75%      +128.5100   +126.6600
 Dollar/Swiss     CHF=        0.9943         0.9950      -0.07%         +2.05%      +0.9977     +0.9919
 Sterling/Dollar  GBP=        1.3175         1.3242      -0.51%         -2.49%      +1.3273     +1.3151
 Dollar/Canadian  CAD=        1.3275         1.3198      +0.58%         +5.55%      +1.3291     +1.3196
 Australian/Doll  AUD=        0.7378         0.7421      -0.58%         -5.42%      +0.7427     +0.7348
 Euro/Swiss       EURCHF=     1.1515         1.1564      -0.42%         -1.49%      +1.1571     +1.1488
 Euro/Sterling    EURGBP=     0.8788         0.8774      +0.16%         -1.07%      +0.8790     +0.8754
 NZ Dollar/Dolar  NZD=        0.6900         0.6942      -0.61%         -2.62%      +0.6943     +0.6886
 Dollar/Norway    NOK=        8.1858         8.1258      +0.74%         -0.26%      +8.2277     +8.1148
 Euro/Norway      EURNOK=     9.4802         9.4456      +0.37%         -3.74%      +9.5155     +9.4427
 Dollar/Sweden    SEK=        8.9014         8.8142      +0.63%         +8.53%      +8.9499     +8.8086
 Euro/Sweden      EURSEK=     10.3091        10.2449     +0.63%         +4.78%      +10.3490    +10.2438

 (Additional reporting by Tom Finn in LONDON
Editing by Meredith Mazzilli and Chizu Nomiyama)
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