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FOREX-U.S. dollar touches 3-week high; yen up on renewed trade uncertainty

Fri, 8th Nov 2019 20:13

* Trump says he has not agreed to roll back tariffs
* Conflicting U.S.-China trade headlines roil FX market
* Canada loses jobs; Canadian dollar falls
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds comments, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Nov 8 (Reuters) - The dollar rallied to a three-week high on Friday, getting some safe-haven
bids, as risk appetite for higher-yielding currencies waned with renewed uncertainty about the rollback of
existing tariffs, a major component of a preliminary U.S.-China trade deal.
The Japanese yen, another safe haven, rose as well.
U.S. President Donald Trump on Friday further magnified the uncertainty, saying he had not agreed to
roll back tariffs.
His comments came a day after U.S. and Chinese officials reportedly agreed to roll back tariffs on
each others' goods in a "phase one" trade deal if it is completed.
But a report also on Thursday seemed to contradict that news, with multiple sources saying the
rollback faces fierce internal opposition at the White House and from outside advisers. The idea of a
tariff rollback was not part of the original October "handshake" deal between Chinese Vice Premier Liu He
and Trump, these sources said.
"What really has been driving the market is this underlying uncertainty over whether or not we will
get that rollback," said Brian Daingerfield, head of G10 FX strategy, at Natwest Markets in Stamford,
Overall, though, sentiment is likely to remain supportive for risky assets, as efforts are being made
to do a trade deal, which would remove a huge risk to the global economic outlook.
"The fact that there is some discussion of moving existing tariffs leans more positive," Daingerfield
White House spokeswoman Stephanie Grisham told Fox Business Network in an interview on Friday that
tariffs could be lifted on Chinese goods if an agreement is reached, but she gave no further details.

In afternoon trading, the dollar index rose 0.2% to 98.362 after hitting a three-week high, led
by gains against the euro, which dipped 0.3% to $1.1020.
Jonas Goltermann, senior markets economist at Capital Economics in London, believes as trade tensions
persist, the dollar is likely to stay strong.
"While we don't expect relative interest rates to boost the dollar much further in the near term, we
think that continued trade tensions and a slowing global economy mean that the greenback will rise a bit
further in 2020 despite the fact that on a trade-weighted basis it is already near its highest level since
the early 2000s," Goltermann said.
The dollar, however, fell 0.1% to 109.17 yen
The Canadian dollar slid against the greenback after data showed the Canadian job market unexpectedly
stagnated in October, losing 1,800 net positions, while the unemployment rate remained at 5.5%.

The U.S. dollar was last up 0.4% at C$1.3228.
"While today's relatively nondescript report won't have a large impact on expectations about monetary
policy at the Bank of Canada, it does add some weight, on the margin, to the view the Bank could cut rates
in next few months," said Don Curren, market strategist, at Cambridge Global Payments.

Currency bid prices at 2:51PM (1951 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR= $1.1020 $1.1049 -0.26% -3.91% +1.1055 +1.1017
Dollar/Yen JPY= 109.1700 109.2700 -0.09% -0.99% +109.4700 +109.0900
Euro/Yen EURJPY= 120.31 120.75 -0.36% -4.68% +120.8700 +120.2200
Dollar/Swiss CHF= 0.9975 0.9948 +0.27% +1.65% +0.9977 +0.9944
Sterling/Dollar GBP= 1.2781 1.2813 -0.25% +0.19% +1.2824 +1.2770
Dollar/Canadian CAD= 1.3226 1.3169 +0.43% -3.01% +1.3236 +1.3166
Australian/Doll AUD= 0.6855 0.6897 -0.61% -2.75% +0.6906 +0.6848
Euro/Swiss EURCHF= 1.0996 1.0992 +0.04% -2.29% +1.1005 +1.0976
Euro/Sterling EURGBP= 0.8620 0.8621 -0.01% -4.05% +0.8630 +0.8599
NZ NZD= 0.6324 0.6364 -0.63% -5.85% +0.6381 +0.6323
Dollar/Norway NOK= 9.1275 9.1088 +0.21% +5.65% +9.1646 +9.1057
Euro/Norway EURNOK= 10.0614 10.0645 -0.03% +1.55% +10.1185 +10.0555
Dollar/Sweden SEK= 9.7037 9.6275 +0.55% +8.26% +9.7164 +9.6249
Euro/Sweden EURSEK= 10.6969 10.6381 +0.55% +4.22% +10.7109 +10.6354

(Reporting by Gertrude Chavez-Dreyfuss; editing by Jonathan Oatis and Richard Chang)

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