November 7, 2019 / 8:19 PM / 3 months ago

FOREX-Dollar rises against yen, Swiss franc on nearing U.S.-China trade deal

    * Risk-on sentiment seen across major currencies
    * China, U.S. to roll back tariffs as part of Phase One deal
    * Sterling falls vs dollar on BoE decision
    * Graphic:

 (Adds new comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Nov 7 (Reuters) - The dollar climbed to more than a five-month peak against the safe-haven
yen and a three-week high versus the Swiss franc on Thursday, bolstered by expectations the United States
and China were inching closer to a trade deal.
    The world's two largest economies have agreed to roll back tariffs on each others' goods as part of
the first phase of a trade deal, officials from both countries said on Thursday, offering a new sign of
progress despite the two sides' ongoing divisions over trade.
    The Chinese commerce ministry, without laying out a timetable, said the two countries had agreed to
cancel the tariffs in phases.
    That pushed investors' risk appetite higher, lifting not only the greenback against the safe-haven yen
and Swiss franc, but also commodity-linked currencies such as the Australian and Canadian dollars.
    "Markets are in full risk-on mode. The rising likelihood of a trade deal between the U.S. and China is
believed to be beneficial to the U.S. economy as it reduces the headwinds facing American companies," said
Karl Schamotta, chief market strategist, at Cambridge Global Payments in Toronto.
    "So what we're seeing is a wash-out of safe-haven positions - we have seen the Swiss franc and yen
falling in response to this move back into higher-yielding assets," he added.
    In afternoon trading, the dollar rose 0.3% against the yen to 109.33 yen, after earlier
climbing to its highest level in more than five months at 109.48 yen.
    The dollar also advanced to a three-week high against the Swiss franc and was last up 0.3% at 0.9956
    Before Thursday's announcement on trade, hopes for a deal had been waning after a senior Trump
administration official told Reuters on Wednesday a meeting to sign the agreement could be delayed until
December and that a venue had not yet been agreed.
    The Australian and New Zealand dollars - proxies for risk which had been weakening due to uncertainty
surrounding the possible trade deal - also gained on the trade deal comments, with the Australian currency
up 0.3% versus the dollar at U.S.$0.6910..
    Against a basket of currencies, the dollar was 0.2% higher at 98.128.
    The euro was down 0.2% against the dollar at $1.1048, having hit three-week lows earlier in the
    The pound, meanwhile, fell to two-week lows against the dollar and was last down 0.3% at $1.2818
 after two Bank of England officials unexpectedly voted to lower interest rates on Thursday to ward
off an economic slowdown. 
    The BoE kept the bank rate steady at 0.75%, but other officials with the central bank, including
Governor Mark Carney, said they would consider a cut if global and Brexit-related headwinds do not ease.

    TD Securities said in a research note that from a slightly longer-term perspective, sterling is likely
to remain rangebound against the dollar over the next few weeks, with investors focused on the UK general
election on Dec. 12.
    Currency bid prices at 3:15PM (2015 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1047        $1.1065     -0.16%         -3.68%      +1.1091     +1.1037
 Dollar/Yen       JPY=        109.2300       108.9600    +0.25%         -0.93%      +109.4800   +108.6600
 Euro/Yen         EURJPY=     120.69         120.58      +0.09%         -4.38%      +121.1100   +120.1400
 Dollar/Swiss     CHF=        0.9953         0.9926      +0.27%         +1.42%      +0.9975     +0.9912
 Sterling/Dollar  GBP=        1.2817         1.2850      -0.26%         +0.47%      +1.2877     +1.2795
 Dollar/Canadian  CAD=        1.3178         1.3180      -0.02%         -3.38%      +1.3199     +1.3158
 Australian/Doll  AUD=        0.6900         0.6882      +0.26%         -2.11%      +0.6913     +0.6863
 Euro/Swiss       EURCHF=     1.0997         1.0985      +0.11%         -2.28%      +1.1012     +1.0976
 Euro/Sterling    EURGBP=     0.8619         0.8609      +0.12%         -4.06%      +0.8658     +0.8603
 NZ               NZD=        0.6371         0.6367      +0.06%         -5.15%      +0.6386     +0.6343
 Dollar/Norway    NOK=        9.1021         9.1704      -0.74%         +5.38%      +9.1866     +9.0802
 Euro/Norway      EURNOK=     10.0572        10.1481     -0.90%         +1.51%      +10.1580    +10.0535
 Dollar/Sweden    SEK=        9.6219         9.6252      -0.18%         +7.34%      +9.6413     +9.5788
 Euro/Sweden      EURSEK=     10.6307        10.6501     -0.18%         +3.57%      +10.6610    +10.6107
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan Oatis and Paul Simao)
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