June 8, 2018 / 7:56 PM / 16 days ago

FOREX-Dollar, yen climb as G7 leaders gather for tense meeting

    * G7 meeting prelude to week filled with event risks
    * Dollar set for weekly loss
    * GRAPHIC-World FX rates in 2018: tmsnrt.rs/2egbfVh

 (Adds comment, updates prices in text, table)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 8 (Reuters) - The dollar rose on Friday after
a four-day losing streak, while the safe-haven yen gained as
investors grew cautious over what was expected to be a
contentious G7 meeting in Canada on Friday.
    Despite Friday's gains, the dollar posted its largest weekly
drop since late March.
    Next week's expected hike in U.S. interest rates by the
Federal Reserve, a European Central Bank policy meeting and a
Brexit bill vote all pose risks for currency traders and could
inject more volatility in the market. (For a factbox, see
)
    "America's isolation on trade policy, which will be on full
show at this weekend's G7 summit in Canada, raises the
admittedly still small risks of a worst-case scenario in which
the U.S. tears up NAFTA (North American Free Trade Agreement) or
launches an all-out trade war with China," said Michael Pearce,
senior U.S. chief economist, at Capital Economics.
    Top U.S. allies scrambled on Friday to keep a Group of Seven
nations summit from veering off track as President Donald Trump
vowed to deal with "unfair trade practices" by Canada and the
European Union.
    In late trading, the dollar rose 0.2 percent against a
basket of currencies to 93.56. But it fell 0.7 percent
for the week, its steepest weekly fall in 10 weeks.
    Trade disputes between the United States and its major
partners will be in the spotlight, with specific focus on the 
Mexican peso and the Canadian dollar.
    High-yielding currencies were a sea of red, meanwhile, with
the yen higher on the day. The dollar was last down 0.2 percent
versus the yen at 109.45

    ECB BETS
    The dollar has come under pressure this week as the euro
bounced back from 10-month lows amid easing Italian political
concerns, and speculation the ECB could signal intentions to
start unwinding its massive bond purchasing program when it
holds its policy meeting on June 14.
    The euro fell 0.3 percent to $1.1766 after rising to
a three-week high of $1.1840 overnight as investors took profits
into this week's bounce. It was up 0.9 percent on the week, its
biggest weekly gain since mid-February.
    While expectations have grown the ECB will signal its
intention to wind down its quantitative easing program, ING
believes the Italian political situation and the potential of a
breakout in trade tensions will keep the central bank from
taking action.
    The Federal Reserve, meanwhile, is widely expected to raise
rates next week. Investors will most likely focus more on clues
about interest rate rises for the rest of the year.
    
    ========================================================
    Currency bid prices at 3:33PM (1933 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1766        $1.1797     -0.26%         -1.92%      +1.1810     +1.1728
 Dollar/Yen       JPY=        109.4600       109.6900    -0.21%         -2.85%      +109.8500   +109.2000
 Euro/Yen         EURJPY=     128.79         129.41      -0.48%         -4.73%      +129.7200   +128.1200
 Dollar/Swiss     CHF=        0.9852         0.9804      +0.49%         +1.12%      +0.9887     +0.9799
 Sterling/Dollar  GBP=        1.3408         1.3420      -0.09%         -0.77%      +1.3438     +1.3355
 Dollar/Canadian  CAD=        1.2932         1.2970      -0.29%         +2.82%      +1.3040     +1.2930
 Australian/Doll  AUD=        0.7598         0.7625      -0.35%         -2.60%      +0.7627     +0.7561
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1596         1.1566      +0.26%         -0.80%      +1.1618     +1.1538
 Euro/Sterling    EURGBP=     0.8771         0.8788      -0.19%         -1.26%      +0.8799     +0.8758
 NZ               NZD=        0.7035         0.7026      +0.13%         -0.72%      +0.7042     +0.7009
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.0547         8.0558      -0.01%         -1.86%      +8.1104     +8.0448
 Euro/Norway      EURNOK=     9.4795         9.5046      -0.26%         -3.75%      +9.5310     +9.4707
 Dollar/Sweden    SEK=        8.7100         8.6978      -0.05%         +6.20%      +8.7739     +8.6939
 Euro/Sweden      EURSEK=     10.2518        10.2607     -0.05%         +4.19%      +10.3113    +10.2460
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London
Editing by Chizu Nomiyama)
  
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