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FOREX-Dollar hovers near 6-week highs on fresh trade, global growth worries


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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Dollar stays firm as investors seek safe haven

* Euro, sterling marginally weaker versus greenback

By Vatsal Srivastava

SINGAPORE, Feb 11 (Reuters) - The dollar stayed near asix-week high against a basket of currencies as fresh worriesover U.S.-Sino trade tensions and global growth pushed investorstowards the safety of the greenback.

"U.S.-China talks are the big focus for the week and thedollar strength is indicative of the cautious market sentimentright now owing to its safe-haven status," said Nick Twidale,chief operating officer at Rakuten Securities Australia.

"The Aussie dollar and the euro are at vulnerable levelsright now and further dampening in risk sentiment can lead tofurther downside in these currencies."

U.S. negotiators this week will press China on longstandingdemands to reform how it treats U.S. companies' intellectualproperty in order to seal a trade deal that could preventtariffs from rising on Chinese imports. urn:newsml:reuters.com:*:nL1N2030ZH

The dollar gained 0.1 percent versus the yen JPY= to109.82. However, traders expect moves in dollar/yen to be smallon Monday as Japanese markets are closed for a public holiday.

The dollar index .DXY , a gauge of its value versus sixmajor peers, was marginally higher at 96.64, putting it on trackfor a eighth straight day of gains.

The Swiss franc CHF= , another currency perceived to be asafe-haven asset was marginally higher at 0.9995.

Trade tensions between the world's two largest economieshave been a major driver of global investor sentiment over thepast year. Market confidence took a hit last week when U.S.President Donald Trump said he did not plan to meet with ChinesePresident Xi Jinping before a March 1 deadline set by the twocountries to achieve a trade deal. urn:newsml:reuters.com:*:nL1N2020Z6

Trump has vowed to increase U.S. tariffs on $200 billionworth of Chinese imports to 25 percent from 10 percent if thetwo sides cannot reach a deal by March 2.

On Monday morning, when China markets reopened after aone-week holiday break, the dollar was 0.5 percent higher versusthe yuan CNY= at 6.7753 while the offshore yuan CNH= wasrelatively unchanged at 6.7808.

Philip Wee, currency strategist at DBS, expects the yuan toremain around 6.80 until there's more clarity on how theU.S.-Sino trade dispute plays out.

The euro EUR= was marginally lower versus the greenback at$1.1322 in Asian trade while the Aussie AUD= was 0.1 percenthigher at $0.7096, after a disastrous week in which it lost 2.2percent. urn:newsml:reuters.com:*:nL3N2030DE

The strength in the dollar has come despite the FederalReserve taking a dovish stance at its policy meeting in January.For now, investors are piling into the safety of the greenbackdue to fears of a sharp global economic slowdown.

The euro EUR= came under pressure as core Europeangovernment debt yields touched their lowest in over two years. The single currency has lost 2.5 percent so far this month.

Benchmark German yields were just 10 basis points away fromzero percent.

The European Commission sharply cut on Thursday itsforecasts for euro zone economic growth for this year and next,with the bloc's largest economies expected to be held back byglobal trade tensions and domestic challenges. urn:newsml:reuters.com:*:nL5N2023IE.

Last month, the International Monetary Fund also downgradedits forecasts for global growth.

Elsewhere, sterling GBP= was down 0.1 percent at $1.2935.Traders expect the pound to remain volatile amid heightenedpolitical uncertainty over the Brexit process. urn:newsml:reuters.com:*:nL5N2035JG

The New Zealand dollar, which lost 2.2 percent last week, was 0.3 percent higher at $0.6767, Analysts expect the kiwi toremain under pressure over the near term.

The Reserve Bank of New Zealand is expected to leaveinterest rates unchanged this week but may adopt a more dovishtone and cut forecasts, in line with other major central banksthat see growing risks to the global outlook. urn:newsml:reuters.com:*:nL3N2050F4 (Reporting by Vatsal Srivastava; Editing by Sam Holmes andRichard Borsuk) ((vatsal.srivastava@thomsonreuters.com; +65 68703571; ReutersMessaging: vatsal.srivastava.thomsonreuters.com@reuters.net))






This article appears in: Politics , Stocks , World Markets , Economy



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