October 12, 2018 / 7:09 PM / 7 months ago

FOREX-Dollar gains on stock bounce and China's upbeat data

    * China produces record trade surplus with U.S. despite tariffs
    * Sterling retreats before EU summit next week
    * Euro declines as ECB's Draghi moderates inflation outlook
    * GRAPHIC-World FX rates in 2018: tmsnrt.rs/2egbfVh

 (Updates to U.S. afternoon trading, adds quote)
    By Richard Leong
    NEW YORK, Oct 12 (Reuters) - The dollar climbed on Friday against a basket of currencies
as global equity prices rebounded from this week's rout and robust Chinese export figures
soothed worries about the world's second-biggest economy and its trade war with Washington.
    Euro and sterling snapped their three-day winning streak in advance of next week's
European Union summit where Britain and the European Union may strike a Brexit deal.

    China's exports jumped 14.5 percent in September from a year earlier, the biggest
year-over-year increase in seven months and marking a record trade surplus with the United
States. The data suggested that the tariffs U.S. President Donald Trump has slapped on
Beijing have yet to bite.
    "The market breathed a sigh of relief with the Chinese trade numbers despite the
tit-for-tat trade war with the U.S.," said Dean Popplewell, vice president of market
analysis at Oanda in Toronto. "People were happy to put on some risk."
    A weaker yuan likely mitigated the sting from U.S. duties on $250 billion worth of
Chinese-made goods, analysts said.
    U.S. Treasury Secretary Steven Mnuchin said on Friday that he told China's central bank
chief that currency issues need to be part of any further U.S.-China trade talks.

    An index that tracks the dollar versus six major currencies was up 0.23 percent
at 95.234, reducing its weekly loss to 0.4 percent.
    The dollar index touched a seven-week high of 96.15 on Tuesday as the U.S. 10-year
Treasury yield hit a seven-year peak due to worries about rising inflation and
U.S. government debt supply.
    "The underlying sentiment remains positive for the buck, but vulnerabilities, as this
week exposed, remained, particularly on the political front ahead of U.S. midterm elections
next month," said Joe Manimbo, senior market analyst at Western Union Business Solutions in
    The MSCI All-Country World index, which tracks stock prices in 47
countries, was up 0.57 percent on the day. It was down 4.4 percent on the week, which was
its steepest decline since at least March.
    On Wall Street, share values rose on solid bank earnings and a bounce in the tech
    The euro and pound retreated from two-week and three-week peaks, respectively, versus
the greenback after EU Brexit negotiator Michel Barnier in comments on Wednesday suggested
an agreement for Britain to leave the EU could be reached next week.
    The single currency was down 0.27 percent at $1.1562, while sterling was 0.59 percent
lower at $1.3157.
    The common currency also fell after European Central Bank President Mario Draghi toned
down his outlook for a rise in underlying inflation from "relatively vigorous" to "gradual."

    The Chinese yuan fell 0.65 percent to 6.9227 per dollar in offshore trading,
as the latest Chinese export figures stoked concerns they would ratchet up trade tension
between China and the United States.
    Currency bid prices at 1451 EDT (1851 GMT):
 Description      RIC         Last       U.S. Close  Pct      YTD Pct  High Bid   Low Bid
                                         Previous    Change   Change              
 Euro/Dollar      EUR=        $1.1559    $1.1593     -0.29    -3.64    +1.1610    +1.1536
 Dollar/Yen       JPY=        111.9700   112.1600    -0.17    -0.62    +112.4900  +111.8900
 Euro/Yen         EURJPY=     129.44     130.02      -0.45    -4.25    +130.4900  +129.3700
 Dollar/Swiss     CHF=        0.9909     0.9893      +0.16    +1.70    +0.9930    +0.9883
 Sterling/Dollar  GBP=        1.3153     1.3233      -0.60    -2.66    +1.3258    +1.3150
 Dollar/Canadian  CAD=        1.3043     1.3027      +0.12    +3.71    +1.3049    +1.3002
 Australian/Doll  AUD=        0.7103     0.7123      -0.28    -8.95    +0.7139    +0.7102
 Euro/Swiss       EURCHF=     1.1454     1.1470      -0.14    -2.01    +1.1492    +1.1450
 Euro/Sterling    EURGBP=     0.8786     0.8757      +0.33    -1.09    +0.8794    +0.8746
 NZ Dollar/Dolar  NZD=        0.6503     0.6520      -0.26    -8.21    +0.6532    +0.6501
 Dollar/Norway    NOK=        8.1717     8.2135      -0.51    -0.43    +8.2218    +8.1712
 Euro/Norway      EURNOK=     9.4471     9.5226      -0.79    -4.08    +9.5367    +9.4479
 Dollar/Sweden    SEK=        8.9619     8.9726      -0.40    +9.27    +8.9835    +8.9387
 Euro/Sweden      EURSEK=     10.3616    10.4032     -0.40    +5.31    +10.4095   +10.3560

 (Reporting by Richard Leong
Additional reporting by Tom Finn in London and Vatsal Srivastava in Singapore
Editing by Leslie Adler)
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