August 29, 2018 / 3:09 PM / 8 months ago

FOREX-Dollar gains vs most currencies as trade deal optimism fades

    * Dollar index steady after coming off four-week low
    * Euro, yen hemmed in tight ranges on low volatility
    * U.S. Q2 GDP revised higher
    * Investors await developments in China-U.S. trade dispute 

 (Adds new comment, FX table, U.S. data, updates prices, changes
byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Aug 29 (Reuters) - The dollar rose against most
currencies on Wednesday especially those in emerging markets, as
optimism over a U.S.-Mexico trade deal gave way to concern that
a conflict over trade between Washington and Beijing was not
about to end soon.
    The deadline for public comment on U.S. President Donald
Trump's tariffs on another $200 billion of Chinese goods is on
Sept. 5, with the new measures possibly taking effect that
    "There is still a long way to go with Trump recently again
threatening tariffs on cars from Europe and the U.S. preparing
another $200 billion of tariffs against China," said Craig
Erlam, senior market analyst, at OANDA in London.
    The U.S currency had dipped to a four-week low overnight as
investors unwound safe-haven bets on the currency after the
United States and Mexico agreed on Monday on overhauls to NAFTA.
    The dollar has fallen for three consecutive weeks, even
though the United States was raising interest rates faster than
other major economies.
    But on Wednesday the dollar rose 0.2 percent against the yen
to 111. 48 yen. It was higher against the Australian and
New Zealand dollars, up 0.6 percent and 0.2 percent
    The dollar was also up against the Mexican peso and
soared against the South African rand and Turkish lira
    The greenback was also supported overall by data showing
U.S. economic growth was a bit stronger than initially thought
in the second quarter, notching its best performance in nearly
four years.
    Gross domestic product grew at a 4.2 percent annualized
rate, the Commerce Department data showed in its second estimate
of GDP growth for the second quarter. That was slightly up from
the 4.1 percent pace of expansion reported in July and was the
fastest rate since the third quarter of 2014.
    The data has cemented expectations for an interest rate rise
next month. Fed funds futures have priced in a 96 percent
probability of a 25 basis-point rate increase at its next policy
announcement on Sept. 26.
    The euro, meanwhile, was flat at $1.1693 after 
gaining in the last three sessions, as worries mounted that
Italy's public deficit could exceed the European Union's ceiling
of 3 percent of gross domestic product.
    The Canadian dollar was slightly lower on the day
versus the U.S. dollar, after rising in the last three days.
    Canada has three days to tackle contentious issues when it
resumes talks with the United States on Wednesday to salvage the
trilateral North American Free Trade Agreement amid signs Ottawa
was open to taking a more conciliatory approach.
    Currency bid prices at 10:51 AM (1451 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1691        $1.1693     -0.02%         -2.54%      +1.1708     +1.1653
 Dollar/Yen       JPY=        111.5000       111.1800    +0.29%         -1.04%      +111.5600   +111.1300
 Euro/Yen         EURJPY=     130.36         130.01      +0.27%         -3.57%      +130.4800   +129.5900
 Dollar/Swiss     CHF=        0.9726         0.9762      -0.37%         -0.17%      +0.9776     +0.9709
 Sterling/Dollar  GBP=        1.2990         1.2875      +0.89%         -3.86%      +1.3007     +1.2846
 Dollar/Canadian  CAD=        1.2951         1.2928      +0.18%         +2.97%      +1.2953     +1.2902
 Australian/Doll  AUD=        0.7285         0.7337      -0.71%         -6.61%      +0.7349     +0.7276
 Euro/Swiss       EURCHF=     1.1372         1.1416      -0.39%         -2.71%      +1.1423     +1.1345
 Euro/Sterling    EURGBP=     0.8997         0.9082      -0.94%         +1.28%      +0.9092     +0.8993
 NZ               NZD=        0.6698         0.6707      -0.13%         -5.48%      +0.6719     +0.6686
 Dollar/Norway    NOK=        8.3544         8.3407      +0.16%         +1.80%      +8.3788     +8.3392
 Euro/Norway      EURNOK=     9.7678         9.7557      +0.12%         -0.82%      +9.7754     +9.7453
 Dollar/Sweden    SEK=        9.1644         9.1373      +0.27%         +11.74%     +9.1876     +9.1274
 Euro/Sweden      EURSEK=     10.7143        10.6850     +0.27%         +8.89%      +10.7285    +10.6736
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tom Finn in London)
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