July 20, 2018 / 7:46 PM / a month ago

FOREX-Dollar drops further on Trump's comments on currency, rate hike

    * Trump doubles down on Fed criticism
    * Chinese yuan midpoint fixing weakest in a year
    * Canadian dollar higher after strong data
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates prices, adds quote, CNBC report, Canada)
    By James Thorne
    NEW YORK, July 20 (Reuters) - The dollar fell across the
board on Friday, as the latest comments by 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 U.S. currency extended losses in afternoon trading after
CNBC reported that Trump was worried the Federal Reserve will
raise interest rates twice more this year.
    The dollar index, a measure of its value against a basket of
six major currencies, erased three days of gains. Against the
yen, the dollar recorded its largest daily fall since February.
    The latest report, which cited a White House official,
followed Trump's criticism on Thursday of the Fed's interest
rate policy and the strong dollar, saying that it could hurt the
U.S. economy..
    Trump earlier told CNBC that 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
.
    Analysts said the rise in the U.S. dollar this year was due
in part to the president's growth-oriented policies, which have
bolstered the Federal Reserve's case for raising rates.

    The fiscal stimulus provided by tax reform is expected to
lead to additional inflation and tighter labor markets, said
Mazen Issa, senior FX strategist at TD Securities in New York.
    "The Fed is responding to the inputs that have been
provided," he said.
    In afternoon trading, the dollar index was 0.77
percent weaker at 94.417, after hitting a one-year high of 95.62
in the previous session.
    
    
    YUAN HIGHER
    Trump's comments on trade pulled the Chinese yuan
higher to 6.7784 per dollar in offshore trading. Over the last
three months, the yuan has fallen nearly 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 0.69 percent at 0.9921
franc.
    The Canadian dollar posted steep gains against the U.S.
dollar following strong retail sales and inflation data, rising
more than 1 percent to 1.3127 Canadian dollars.
    The euro was also higher, up 0.7 percent at $1.1725.
    
========================================================
    Currency bid prices at 3:24PM (1924 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1725        $1.1641     +0.72%         -2.26%      +1.1738     +1.1627
 Dollar/Yen       JPY=        111.4900       112.4500    -0.85%         -1.05%      +112.6100   +111.4100
 Euro/Yen         EURJPY=     130.74         130.92      -0.14%         -3.28%      +131.2000   +130.6100
 Dollar/Swiss     CHF=        0.9921         0.9990      -0.69%         +1.83%      +1.0010     +0.9916
 Sterling/Dollar  GBP=        1.3132         1.3012      +0.92%         -2.81%      +1.3139     +1.2996
 Dollar/Canadian  CAD=        1.3127         1.3268      -1.06%         +4.37%      +1.3289     +1.3114
 Australian/Doll  AUD=        0.7421         0.7358      +0.86%         -4.87%      +0.7431     +0.7319
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1634         1.1631      +0.03%         -0.47%      +1.1654     +1.1627
 Euro/Sterling    EURGBP=     0.8927         0.8944      -0.19%         +0.50%      +0.8957     +0.8925
 NZ Dollar/Dolar  NZD=        0.6810         0.6744      +0.98%         -3.90%      +0.6817     +0.6721
 Dollar/Norway    NOK=        8.1731         8.2326      -0.72%         -0.41%      +8.2481     +8.1700
 Euro/Norway      EURNOK=     9.5849         9.5870      -0.02%         -2.68%      +9.6200     +9.5657
 Dollar/Sweden    SEK=        8.8501         8.9120      +0.05%         +7.91%      +8.9273     +8.8476
 Euro/Sweden      EURSEK=     10.3792        10.3740     +0.05%         +5.49%      +10.4085    +10.3680
 
    

    
 (Reporting by James Thorne; Additional reporting by Gertrude
Chavez-Dreyfuss; Editing by Chizu Nomiyama and Susan Thomas)
  
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