June 20, 2018 / 4:15 PM / a month ago

FOREX-Dollar hovers near 11-month high as trade concerns weigh

    * China strong midpoint fixing calms investors' nerves
    * U.S. Commerce's Ross sees more trade pressure on China 
    * Major central bankers offer no new policy clues in Portugal

 (Updates market action; changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, June 20 (Reuters) - The dollar was little changed on Wednesday,
hovering near an 11-month peak against a basket of major currencies as China's
signal of a tolerance of a stronger yuan offset anxiety about the global trade
conflict.
    The greenback, as well as the yen and Swiss franc, remained well supported as
traders braced for possibly another round of tariffs.
    "The market is holding its breath on what is the next development," said Mazen
Issa, senior FX strategist at TD Securities in New York. "We just went through a
significant policy move in trade."
    Before Wednesday's market open, the People's Bank of China cut the yuan's
midpoint rate to 6.4586 per dollar, the weakest level since Jan. 12 and
much stronger than market models had suggested.
    The move is seen as a bid to stabilize investor sentiment and avert the yuan
from sagging further. 
    On Tuesday, the Chinese currency fell a five-month low of 6.4948 yuan in the
offshore market following U.S. President Donald Trump's threat of a 10
percent tariff on $200 billion of Chinese imports.
    U.S. Commerce Secretary Wilbur Ross said the White House will likely keep up
pressure on Beijing in an attempt to reach a deal on greater American access to
Chinese markets and narrow its trade surplus with the United States.
    In this climate of rising trade tensions, heads of major central banks spoke of
this risk in their economic outlook at a conference in Sintra, Portugal.
    U.S. Federal Reserve President Jerome Powell said "in principle changes in
trade policy could cause us to have to question the outlook."
    Still Powell and his peers at the European Central Bank and Bank of Japan,
Mario Draghi and Haruhiko Kuroda, offered no fresh views on their policy stance.
    At 11:50 a.m. EDT (1550 GMT), an index that tracks the dollar against the euro,
yen, sterling and three other currencies was down 0.09 percent at 94.994
after touching an 11-month peak of 95.299 earlier on Wednesday.
    The euro was little changed at $1.1584 and 127.56 yen. 
    The greenback was steady against the Japanese currency  at 110.11 yen.
    Many emerging currencies steadied after Tuesday's losses due to trade fears.
The Mexican peso gained 0.7 percent on the day, while the South African
rand rose 0.9 percent.
    The Australian dollar, seen as a proxy on market sentiment toward China, fell
to a 13-month low of $0.73475 on Tuesday before bouncing a bit to
$0.73805.
    The Swiss franc dipped 0.2 percent to 0.9959 per dollar, erasing the
prior day's gains.
========================================================
    Currency bid prices at 1151 EDT (1551 GMT):
 Description      RIC        Last      U.S.      Pct     YTD     High Bid  Low Bid
                                       Close     Change  Pct               
                                       Previous          Change            
                                       Session                             
 Euro/Dollar                 $1.1582   $1.1588   -0.05   -3.45   +1.1600   +1.1538
 Dollar/Yen                  110.1300  110.0400  +0.08   -2.25   +110.240  +109.870
 Euro/Yen                    127.57    127.53    +0.03   -5.63   +127.730  +127.130
 Dollar/Swiss                0.9958    0.9939    +0.19   +2.21   +0.9982   +0.9938
 Sterling/Dollar             1.3203    1.3178    +0.19   -2.29   +1.3215   +1.3149
 Dollar/Canadian             1.3294    1.3282    +0.09   +5.70   +1.3310   +1.3268
 Australian/Doll             0.7378    0.7381    -0.04   -5.42   +0.7408   +0.7370
 ar                                                                        
 Euro/Swiss                  1.1534    1.1519    +0.13   -1.33   +1.1543   +1.1511
 Euro/Sterling               0.8770    0.8795    -0.28   -1.27   +0.8801   +0.8769
 NZ Dollar/Dolar             0.6875    0.6899    -0.35   -2.98   +0.6916   +0.6865
 Dollar/Norway               8.1544    8.1820    -0.34   -0.64   +8.2065   +8.1545
 Euro/Norway                 9.4464    9.4851    -0.41   -4.08   +9.4936   +9.4473
 Dollar/Sweden               8.8781    8.8944    -0.23   +8.25   +8.9307   +8.8602
 Euro/Sweden                 10.2848   10.3090   -0.23   +4.53   +10.3172  +10.2690
    

    
 (Additional reporting by Saikat Chatterjee in LONDON; Editing by Alison Williams)
  
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