September 20, 2019 / 7:52 PM / 25 days ago

FOREX-Dollar posts weekly gain on hopes for trade, Fed on hold

    * Sterling cools on doubts about Brexit deal
    * Futures imply traders see one more U.S. rate cut in 2019
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action)
    By Richard Leong
    NEW YORK, Sept 20 (Reuters) - The U.S. dollar rose against a
basket of currencies on Friday, for its first weekly increase in
three, prompted by hopes of progress in U.S.-China trade talks
and that the Federal Reserve would not lower rates aggressively.
    Sterling retreated from a two-month high versus the
greenback after the Irish foreign minister said that London and
the European Union were not yet close to a Brexit deal.
    U.S. and Chinese deputy trade negotiators are set to
continue talks that began on Thursday in an effort to lay the
groundwork for high-level discussions in early October that will
determine whether the world's biggest economies can reach a
trade deal.
    While tariffs and worries about protracted supply-chain
disruption have hampered global business activity, the U.S.
economy is still faring relatively well, analysts said.
    "The U.S. economy is clearly doing better than anyone else,"
said Joseph Trevisani, senior analyst at FX Street in New York.
"I'm still in the stronger dollar camp."
    With housing starts at a 12-year high and factory output
rebounding in August, the longest U.S. expansion on record seems
to have more legs, he said.
    In late U.S. trading, an index that tracks the dollar
against a basket of six major currencies was up 0.24% at
98.51 for a weekly gain of about 0.25%.
    The euro fell 0.2% on the day to $1.10175, while
the greenback slipped 0.37% to 107.645 yen.
    Against a favorable economic backdrop, the Fed lowered key
lending rates by a quarter point on Wednesday, but signaled a
higher bar to further reductions in borrowing costs.

    On Friday, Fed officials delivered different assessments on
the economy and what should be done about it.
    Interest rates futures implied traders saw a 63% chance of
another rate cut by year-end, compared with 69% late on
Thursday, CME Group's FedWatch program showed.
    Meanwhile, sterling was briefly the biggest gainer overnight
against the dollar after European Commission President
Jean-Claude Juncker said late Thursday he thought Brussels could
reach agreement with Britain on its departure from the European
Union.
    Sterling's gains faded after the comments by Irish Foreign
Minister Simon Coveney on a Brexit deal, and a Financial Times
report that British Prime Minister Boris Johnson had told
colleagues he did not expect to be able to reach a full "legally
operable" deal covering the Irish border at a meeting of EU
leaders. 
    The pound was down 0.37% at $1.2476 after touching
a two-month high at $1.2582. It reached a four-month high of
87.875 pence per euro before easing to 88.26 pence,
down 0.15% on the day. 
========================================================
    Currency bid prices at 3:20PM (1920 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1018        $1.1040     -0.20%         -3.93%      +1.1068     +1.0997
 Dollar/Yen       JPY=        107.6200       108.0000    -0.35%         -2.39%      +108.0800   +107.6300
 Euro/Yen         EURJPY=     118.58         119.27      -0.58%         -6.05%      +119.3700   +118.5500
 Dollar/Swiss     CHF=        0.9913         0.9927      -0.14%         +1.01%      +0.9935     +0.9891
 Sterling/Dollar  GBP=        1.2472         1.2524      -0.42%         -2.23%      +1.2581     +1.2462
 Dollar/Canadian  CAD=        1.3275         1.3260      +0.11%         -2.65%      +1.3300     +1.3254
 Australian/Doll  AUD=        0.6764         0.6789      -0.37%         -4.04%      +0.6809     +0.6761
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0920         1.0960      -0.36%         -2.97%      +1.0969     +1.0913
 Euro/Sterling    EURGBP=     0.8832         0.8814      +0.20%         -1.69%      +0.8845     +0.8788
 NZ               NZD=        0.6257         0.6301      -0.70%         -6.85%      +0.6308     +0.6256
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.0631         8.9783      +0.94%         +4.91%      +9.0671     +8.9656
 Euro/Norway      EURNOK=     9.9872         9.9136      +0.74%         +0.82%      +9.9900     +9.9111
 Dollar/Sweden    SEK=        9.7189         9.6858      +0.11%         +8.42%      +9.7378     +9.6612
 Euro/Sweden      EURSEK=     10.7073        10.6960     +0.11%         +4.32%      +10.7205    +10.6880
 
    
 (Additional reporting by Saikat Chatterjee in LONDON; Editing
by Bernadette Baum and Andrea Ricci)
  
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