July 20, 2018 / 2:26 PM / 5 months ago

FOREX-Dollar tumbles as Trump repeats criticism of Fed, strong currency

 (Adds comments, FX table, updates prices, changes byline,
dateline previous LONDON)
    * Trump doubles down on Fed criticism
    * Chinese yuan midpoint fixing weakest in a year
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

    By Gertrude Chavez-Dreyfuss
    NEW YORK, July 20 (Reuters) - The dollar fell across the
board on Friday, as the latest comments from U.S. President
Donald Trump complaining about the strength of the greenback and
the rise in U.S. interest rates squashed a rally that took it to
a one-year high the previous session.
    The dollar index, a measure of its value against a basket of
six major currencies, was on track to post its largest one-day
loss in three weeks. Against the yen, the dollar was on pace for
its worst daily fall in two months.
    Trump on Friday repeated his criticism of the Fed's interest
rate policy and the strong dollar. He said on Twitter that the
Fed's policy on raising interest rates takes away from the
United States' "big competitive edge" and could hurt the U.S.
economy..
    That followed CNBC's interview of Trump who said a strong
dollar put the United States at a disadvantage and he was ready
to place tariffs on $500 billion of imported goods from China
.
    Some market participants though were skeptical of the
long-term impact of Trump's remarks.
    "This is more noise than direction as he alone will likely
yield little to no influence over Fed decision-making," said
Mazen Issa, senior FX strategist, at TD Securities in New York.
    "At this juncture, few alternatives exist at this time to
check U.S. dollar firmness," he added.
    In the short term, however, his remarks gave an excuse for
traders to pocket some profits on the dollar's recent strength.
    Against a basket of other currencies, the dollar was
0.6 percent weaker at 94.565, just below the one-year high of
95.62 it reached in the previous session.  
    Despite the ratcheting higher of trade tensions, the dollar
was still up 3 percent over the last three months, supported by
expectations the U.S. central bank will keep raising interest
rates in the coming months. 
  
    
    YUAN HIGHER
    Trump's comments on trade pulled the yuan more than half a
percent lower in London before the Chinese currency
rose to 6.7804 per dollar in the New York session. Over the last
three months, the yuan has fallen more than 8 percent against
the U.S. dollar.
    The People's Bank of China dropped the midpoint
for a seventh straight trading day to 6.7671 per dollar on
Friday, or 0.9 percent weaker than the previous fix of 6.7066.  
    Friday's fixing was the lowest since July 14, 2017, and
represented the biggest one-day weakening in percentage terms
since June 27, 2016.
    A soft patch in the dollar, meanwhile, prompted some
relatively high-yielding currencies to regain some balance.
Safe-haven currencies such as the Swiss franc also remain
well supported, with the dollar down 0.5 percent at 0.9945
franc.
    The euro was also higher, up 0.6 percent at $1.1717.
    
    ========================================================
    Currency bid prices at 10:13AM (1413 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1710        $1.1641     +0.59%         -2.38%      +1.1723     +1.1627
 Dollar/Yen       JPY=        111.6500       112.4500    -0.71%         -0.91%      +112.6100   +111.6300
 Euro/Yen         EURJPY=     130.77         130.92      -0.11%         -3.26%      +131.2000   +130.6100
 Dollar/Swiss     CHF=        0.9940         0.9990      -0.50%         +2.01%      +1.0010     +0.9939
 Sterling/Dollar  GBP=        1.3100         1.3012      +0.68%         -3.05%      +1.3115     +1.2996
 Dollar/Canadian  CAD=        1.3127         1.3268      -1.06%         +4.37%      +1.3289     +1.3114
 Australian/Doll  AUD=        0.7415         0.7358      +0.77%         -4.95%      +0.7421     +0.7319
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1640         1.1631      +0.08%         -0.42%      +1.1654     +1.1627
 Euro/Sterling    EURGBP=     0.8936         0.8944      -0.09%         +0.60%      +0.8957     +0.8933
 NZ               NZD=        0.6799         0.6744      +0.82%         -4.05%      +0.6804     +0.6721
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.1916         8.2326      -0.50%         -0.19%      +8.2481     +8.1835
 Euro/Norway      EURNOK=     9.5933         9.5870      +0.07%         -2.59%      +9.6200     +9.5657
 Dollar/Sweden    SEK=        8.8716         8.9120      +0.15%         +8.17%      +8.9273     +8.8609
 Euro/Sweden      EURSEK=     10.3896        10.3740     +0.15%         +5.60%      +10.4085    +10.3680
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu
Nomiyama)
  
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