September 4, 2019 / 2:20 PM / 9 months ago

FOREX-Dollar, yen fall as global tensions ease

    * Hong Kong, Italy, Britain news helps risk appetite
    * Euro lifted away from 28-month lows, Lagarde comments help
    * Dollar weakness helps emerging market currencies
    * Sterling bounces on bid to stop no-deal Brexit
    * Graphic: World FX rates in 2019

 (Recasts, updates prices, adds comment, FX table, changes
byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 4 (Reuters) - The safe-haven dollar and yen
fell on Wednesday as risk sentiment improved after global
political worries eased with what markets perceived as positive
news in Hong Kong, Italy and Britain.
    The dollar index slid for a second straight session, while
the yen, which draws safe-haven bids in times of geopolitical
stress, dropped for the first time in four days against the
    Risk appetite rose on reports Hong Kong leader Carrie Lam
would announce the formal withdrawal of an extradition bill that
triggered months of unrest.
    In Italy, the 5-Star Movement approved a coalition deal with
the Democratic Party, paving the way for a new government, while
lawmakers opposed to a no-deal Brexit gained the upper hand in
Britain, triggering a global equities rally.
    Edward Moya, senior market analyst at OANDA in New York,
said the dollar's weakness was triggered by this "risk-on move
in Hong Kong that gave Hong Kong equities one of the best moves
in a few years." That has boosted appetite for riskier
currencies that have generally higher yields, he added.
    "Everyone has been waiting for this major dollar reversal
for quite some time. It has never come to fruition," Moya said.
"This is providing a little bit of unwinding of some dollar  
bullish positions."
    In mid-morning trading, the dollar was last down 0.4%
against a basket of major currencies, at 98.656.
    The yen fell against the dollar, which rose 0.3% to 106.27
yen. It also declined against the euro, which gained 0.7%
to 117.045 yen.
    The euro also rose 0.4% versus the dollar to $1.1011
after comments from Christine Lagarde, who will likely be the
European Central Bank's next president, introduced some doubt
over the scale of an ECB stimulus package expected next week.
    Lagarde said highly accommodative monetary policy for a
prolonged period was necessary but she added that the bank
needed to be mindful of the negative side-effects of such tools.

    Expectations for an interest cut, the relaunch of asset
purchases and other ECB measures to stimulate the economy have
weighed on the euro. On Tuesday, it hit a 28-month low around
    The dollar's weakness helped China's offshore yuan
pull away further from record lows plumbed earlier this week.
The Chinese currency was last up 0.4% against the dollar, which
fell to 7.1511 yuan. 
    The British pound recovered Tuesday's losses, when it hit a
three-year low, after the latest parliamentary attempt to stop a
no-deal Brexit took a step forward. 
    Sterling bounced 0.9% to $1.2185, and against the
euro it rallied 0.4% to 90.45 pence.
    Lawmakers who defeated Prime Minister Boris Johnson's
government on a crucial motion late on Tuesday are expected to
introduce a bill in parliament seeking to stop Britain from
leaving the European Union on Oct. 31 without transitional
    Currency bid prices at 10:03 AM (1403 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1009        $1.0972     +0.34%         -4.01%      +1.1024     +1.0969
 Dollar/Yen       JPY=        106.2500       105.9200    +0.31%         -3.64%      +106.3300   +105.8400
 Euro/Yen         EURJPY=     117.00         116.24      +0.65%         -7.30%      +117.1400   +116.1400
 Dollar/Swiss     CHF=        0.9839         0.9866      -0.27%         +0.25%      +0.9883     +0.9840
 Sterling/Dollar  GBP=        1.2166         1.2084      +0.68%         -4.63%      +1.2219     +1.2079
 Dollar/Canadian  CAD=        1.3278         1.3332      -0.41%         -2.63%      +1.3344     +1.3268
 Australian/Doll  AUD=        0.6788         0.6757      +0.46%         -3.72%      +0.6792     +0.6756
 Euro/Swiss       EURCHF=     1.0836         1.0828      +0.07%         -3.71%      +1.0860     +1.0825
 Euro/Sterling    EURGBP=     0.9048         0.9078      -0.33%         +0.71%      +0.9085     +0.9018
 NZ               NZD=        0.6347         0.6334      +0.21%         -5.51%      +0.6362     +0.6327
 Dollar/Norway    NOK=        9.0583         9.1004      -0.46%         +4.86%      +9.1066     +9.0530
 Euro/Norway      EURNOK=     9.9742         9.9889      -0.15%         +0.69%      +9.9935     +9.9613
 Dollar/Sweden    SEK=        9.7711         9.8197      -0.18%         +9.01%      +9.8253     +9.7494
 Euro/Sweden      EURSEK=     10.7581        10.7771     -0.18%         +4.81%      +10.7771    +10.7320
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tommy Wilkes in London
Editing by Paul Simao)
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