June 26, 2019 / 7:24 PM / 5 months ago

FOREX-Dollar holds steady on reduced bets on steep U.S. rate cut

    * Uncertainty lingers over U.S.-China trade deal before G20
summit
    * U.S. durable goods orders fall, goods balance gap widens 
    * Bitcoin soars 16% towards $14,000, extends sizzling rally
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, June 26 (Reuters) - The dollar held steady against
a basket of currencies on Wednesday as traders rolled back bets
of an aggressive interest rate decrease next month after
comments from Federal Reserve officials that such a move may not
be warranted at this time.
    Bitcoin rang up a stellar day, jumping over
16.26% to its highest level since January 2018.
    The greenback and the euro strengthened against the yen
after U.S. Treasury Secretary Steven Mnuchin was quoted by CNBC
as saying the trade deal between the United States and China is
"about 90%" complete. Mnuchin’s comments were later restated to
show he was using the past tense to describe progress in the
U.S.-China talks. 
    The pullback in the yen and Swiss franc was limited as
traders remain jittery over prospects at the G20 summit this
weekend in Osaka, Japan, where U.S. President Donald Trump and
Chinese President Xi Jinping are due to have a meeting. Some
bids for both perceived safe-haven currencies persisted amid
tensions between Iran and the United States. 
    Traders have been speculating whether Trump and Xi could at
least reach an agreement to restart talks at the summit in a bid
to avert more tariffs between the two nations.
    "No breakthroughs are expected. There is hope they will
continue negotiating," said Eric Viloria, currency strategist at
Credit Agricole in New York. "That could be neutral for the
dollar."
    Earlier Wednesday, Trump told Fox Business Network he would
impose additional duties on Chinese imports if he does not
clinch a deal with Xi.
    In late U.S. trading, the dollar was up 0.57% at 107.790 yen
, while the euro was 0.58% higher at 122.585 yen
. 
    The greenback was little changed against the euro
at  $1.1372.
    The dollar index edged up 0.09%, holding above a
three-month low, in the wake of comments from two Federal
Reserve officials, which cooled expectations the central bank
would lower key lending rates by an aggressive half a percentage
point at its next policy meeting on July 30-31.
    On Tuesday, Fed Chairman Jerome Powell stressed the central
bank's independence from Trump, who is pushing for rate cuts.
St. Louis Fed President James Bullard, considered one of the
most dovish U.S. central bankers, surprised some investors by
saying a 50 basis point cut in rates "would be overdone".

    The dollar fell last week after policy-makers opened the
door to rate cuts in coming months. 
    Interest rates futures implied traders fully expect a rate
cut from the Fed next month, but they now see a 24% chance of a
50 basis-point decrease, down from 30% late on Tuesday,
according to CME Group's FedWatch tool.   
    Bitcoin continued its red-hot streak, approaching $14,000 on
the Luxembourg-based Bitstamp exchange late Wednesday. The
world's biggest and best-known virtual currency has been on a
tear since Facebook rolled out its plan for its own
digital currency, stoking bets for their usage to grow.

    Currency bid prices at 3:09PM (1909 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1370        $1.1365     +0.04%         -0.86%      +1.1390     +1.1349
 Dollar/Yen       JPY=        107.8100       107.1700    +0.60%         -2.22%      +107.8400   +107.1100
 Euro/Yen         EURJPY=     122.60         121.82      +0.64%         -2.87%      +122.6300   +121.7800
 Dollar/Swiss     CHF=        0.9776         0.9752      +0.25%         -0.39%      +0.9784     +0.9744
 Sterling/Dollar  GBP=        1.2689         1.2697      -0.06%         -0.54%      +1.2707     +1.2664
 Dollar/Canadian  CAD=        1.3117         1.3167      -0.38%         -3.81%      +1.3193     +1.3107
 Australian/Doll  AUD=        0.6985         0.6957      +0.40%         -0.91%      +0.6994     +0.6952
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1116         1.1085      +0.28%         -1.23%      +1.1124     +1.1077
 Euro/Sterling    EURGBP=     0.8960         0.8954      +0.07%         -0.27%      +0.8976     +0.8942
 NZ               NZD=        0.6677         0.6638      +0.59%         -0.60%      +0.6692     +0.6610
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.4928         8.5320      -0.46%         -1.69%      +8.5513     +8.4773
 Euro/Norway      EURNOK=     9.6558         9.6994      -0.45%         -2.53%      +9.7124     +9.6530
 Dollar/Sweden    SEK=        9.2604         9.2768      -0.18%         +3.31%      +9.2987     +9.2483
 Euro/Sweden      EURSEK=     10.5280        10.5470     -0.18%         +2.57%      +10.5626    +10.5220
 
    
 (Additional reporting by Saikat Chatterjee in LONDON
Editing by Susan Thomas and Chizu Nomiyama)
  
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