September 11, 2018 / 7:15 PM / 7 months ago

FOREX-Renewed U.S.-China trade jitters prop up dollar

    * China to request WTO slap duties on U.S. goods  
    * Euro, sterling stall after rising on hopes for Brexit deal
    * Report on potential Deutsche , Commerzbank merger supports
    * Australian dollar slides to lowest since Feb 2016
    * Graphic: World FX rates in 2018

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, Sept 11 (Reuters) - The U.S. dollar edged up
against a basket of major currencies on Tuesday as concerns
about trade friction between China and the United States
prompted some safe-haven buying of the currency.
    China will ask the World Trade Organization (WTO) next week
for permission to impose sanctions on the United States for
Washington's non-compliance with a ruling in a dispute over U.S.
dumping duties.
    "The news with China is bad," said Stan Shipley, strategist
at ISI Evercore in New York. "It's going to be a long time
before it's going to be settled."
    Anxiety over the trade dispute between the world's two
biggest economies outweighed optimism about a possible agreement
on the terms of Britain's exit from the European Union and
reversed some of euro and sterling's gains on Monday.
    The Australian dollar was another casualty of the trade
tension between Beijing and Washington. The currency, seen as a
proxy for global growth due to Australia's export-oriented 
economy, tumbled to its weakest level against the greenback
since February 2016.
    Still, there were encouraging signs that the Trump
administration is moving toward resolving its trade issues with
Canada and Europe, Shipley said.    
    Higher share prices on Wall Street also boosted the
greenback, with the S&P 500 index up 0.46 percent.

    The dollar index that tracks the greenback against six major
currencies was up 0.09 percent at 95.239. It had shed
more than 0.2 percent on Monday as the euro and sterling bounced
after the European Union chief negotiator Michel Barnier hinted
at a possible Brexit deal.
    The euro was underpinned by a decline in Italian government
borrowing costs after Economy Minister Giovanni Tria on Monday
predicted that yields would drop as the government
lays out its eagerly awaited 2019 budget.      
    The euro initially rose 0.4 percent to $1.16445
before turning lower in early U.S. trading. It later pared those
losses to be little changed on the day at $1.15865 following a
German magazine Der Spiegel report that said the executives of
Deutsche Bank and Commerzbank were growing
more open to the idea of a merger.
    Sterling touched a five-week high against the dollar earlier
on Tuesday before fading to $1.2989, down 0.3 percent
on the day, according to Reuters data.
    The Australian dollar was down 0.16 percent to
$0.71010 after hitting its lowest since February 2016 on
concerns that any damage to the Chinese economy from a trade war
could hurt Australia's exporters.  
    The New Zealand dollar also hovered near a
2-1/2-year low at $0.6507. China's offshore yuan fell
0.2 percent to 6.8673, a 2-1/2-week low. 
    Currency bid prices at 2:54PM (1854 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1585        $1.1592     -0.06%         -3.43%      +1.1643     +1.1566
 Dollar/Yen       JPY=        111.5800       111.1100    +0.42%         -0.97%      +111.6300   +111.0700
 Euro/Yen         EURJPY=     129.27         128.83      +0.34%         -4.37%      +129.8000   +128.7800
 Dollar/Swiss     CHF=        0.9735         0.9749      -0.14%         -0.08%      +0.9759     +0.9728
 Sterling/Dollar  GBP=        1.3008         1.3025      -0.13%         -3.73%      +1.3086     +1.2971
 Dollar/Canadian  CAD=        1.3130         1.3162      -0.24%         +4.40%      +1.3174     +1.3123
 Australian/Doll  AUD=        0.7100         0.7114      -0.20%         -8.99%      +0.7128     +0.7085
 Euro/Swiss       EURCHF=     1.1278         1.1302      -0.21%         -3.52%      +1.1343     +1.1264
 Euro/Sterling    EURGBP=     0.8904         0.8898      +0.07%         +0.24%      +0.8937     +0.8880
 NZ Dollar/Dolar  NZD=        0.6506         0.6525      -0.29%         -8.19%      +0.6540     +0.6502
 Dollar/Norway    NOK=        8.3320         8.3878      -0.67%         +1.52%      +8.4012     +8.3281
 Euro/Norway      EURNOK=     9.6542         9.7263      -0.74%         -1.97%      +9.7334     +9.6535
 Dollar/Sweden    SEK=        9.0660         9.0667      -0.08%         +10.54%     +9.0795     +9.0105
 Euro/Sweden      EURSEK=     10.5045        10.5130     -0.08%         +6.76%      +10.5190    +10.4820

 (Additional reporting by Tommy Wilkes in LONDON
Editing by Bernadette Baum and Meredith Mazzilli)
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