June 24, 2019 / 7:10 PM / in 8 months

FOREX-Dollar slips on U.S. rate cut bets, bitcoin on fire

    * Investors await outcome of Trump-Xi meeting at G20 summit
    * U.S.-Iran tension underpins safe-haven support for yen
    * Dollar remains pressured by bets on multiple U.S. rate cuts
    * Bitcoin breaks $11,000 for first time since March 2018
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action)
    By Richard Leong
    NEW YORK, June 24 (Reuters) - The dollar softened against a basket of currencies on
Monday on bets the U.S. Federal Reserve may lower interest rates more than once this
year, while tensions between Iran and the United States provided safe-haven support for
the yen.
    Bitcoin extended its torrid weekend run, when it broke above $11,000 for the first
time since March 2018.
    The world's biggest and best-known cryptocurrency has risen nearly 200% this year
as Facebook's plan to introduce its Libra digital coin stoked optimism about
widening usage of virtual currencies.
    Investors awaited whether U.S. President Donald Trump and China President Xi
Jinping would at least call a truce in their trade war at the G20 summit in Japan later
this week. 
    "Today's session is wedged between the Fed's dovish turn last week and the G20
later this week," said Brian Daingerfield, head of G10 FX strategy, Americas in
Stamford, Connecticut. "With the G20, it's hard to have confidence in the direction for
the market." 
    Markets believe that if Washington and Beijing fail to dial back their heated
rhetoric on trade, then the Fed will be forced to cut interest rates to prevent a wider
economic slowdown resulting from higher U.S. tariffs on imports.
    Both China and the United States should make compromises in trade talks, Chinese
Vice Commerce Minister Wang Shouwen said on Monday.
    Interest rates futures implied traders priced in a 100% chance the Fed would cut
rates at the end of July, while they are betting on a high probability it might lower
rates two more times after that, according to CME Group's FedWatch program.
    Expectations of falling U.S. rates have weakened the greenback. An index that
tracks the dollar against a group of six currencies fell 1.57% last week, its
biggest weekly loss in four months. At 2:57 p.m. (1857 GMT), the dollar index dipped
0.24% at 95.985.
    The latest weekly positioning data confirmed the view of a weakening dollar. 
    Hedge funds have turned mildly bearish on the greenback, and have increased bets on
weakness in other currencies such as the Australian dollar as their outlook on the
global economy has soured.
    Meanwhile, the yen retreated from its strongest levels against the dollar since
January after Trump called off a U.S. military strike against Iran last week, but
tensions between the two nations remain high.
    Trump on Monday imposed new sanctions on Iran in a bid to curb its nuclear program.
    The yen was steady at 107.31 per dollar after reaching 107.045 on Friday
as nervous traders piled into the safe-haven currency.
    Among digital currencies, bitcoin rose 1.44% to $10,987.81 on the
Luxembourg-based Bitstamp exchange.
    Currency bid prices at 1457 EDT (1857 GMT):
 Description      RIC       Last       U.S.      Pct      YTD Pct  High Bid   Low Bid
                                       Close     Change   Change              
 Euro/Dollar      EUR=      $1.1400    $1.1366   +0.30%   -0.61%   +1.1403    +1.1363
 Dollar/Yen       JPY=      107.2900   107.3000  -0.01%   -2.69%   +107.5300  +107.2600
 Euro/Yen         EURJPY=   122.31     121.98    +0.27%   -3.10%   +122.3900  +122.0000
 Dollar/Swiss     CHF=      0.9719     0.9762    -0.44%   -0.99%   +0.9782    +0.9711
 Sterling/Dollar  GBP=      1.2744     1.2740    +0.03%   -0.10%   +1.2766    +1.2709
 Dollar/Canadian  CAD=      1.3188     1.3221    -0.25%   -3.29%   +1.3221    +1.3178
 Australian/Doll  AUD=      0.6966     0.6923    +0.62%   -1.18%   +0.6968    +0.6929
 Euro/Swiss       EURCHF=   1.1079     1.1099    -0.18%   -1.56%   +1.1130    +1.1066
 Euro/Sterling    EURGBP=   0.8943     0.8923    +0.22%   -0.46%   +0.8960    +0.8920
 NZ               NZD=      0.6617     0.6587    +0.46%   -1.49%   +0.6626    +0.6582
 Dollar/Norway    NOK=      8.4761     8.4950    -0.22%   -1.88%   +8.5106    +8.4703
 Euro/Norway      EURNOK=   9.6619     9.6627    -0.01%   -2.47%   +9.6860    +9.6493
 Dollar/Sweden    SEK=      9.2764     9.3509    -0.52%   +3.49%   +9.3548    +9.2760
 Euro/Sweden      EURSEK=   10.5757    10.6307   -0.52%   +3.04%   +10.6396   +10.5714
 (Additional reporting by Saikat Chatterjee in LONDON
Editing by Mark Heinrich, Nick Zieminski and Tom Brown)
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