June 24, 2019 / 2:21 PM / 6 months ago

FOREX-Dollar dips on U.S. rate-cut bets, bitcoin on fire

    * Investors await outcome on Trump-Xi meeting at G20 summit
    * U.S.-Iran tension underpins safe-haven support for yen
    * Dollar remains pressured by bets on multiple U.S. rate
cuts
    * Bitcoin breaks $11,000 for first time since March 2018
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, June 24 (Reuters) - The dollar softened against a
basket of currencies on Monday on bets the Federal Reserve may
lower interest rates more than once this year, while tensions
between Iran and the United States provided safe-haven support
for the yen.
    Bitcoin held firm after its torrid run over the weekend,
when it broke above $11,000 for the first time since March 2018.
    The world's biggest and best-known cryptocurrency has risen
nearly 200% this year as Facebook's plan to introduce its
Libra digital coin stoked optimism about a widening usage of
virtual currencies.
    Investors awaited whether U.S. President Donald Trump and
China President Xi Jinping would at least call a truce on their
trade war at a summit in Japan later this week. 
    "The Trump-Xi meeting at the G20 this coming weekend and
heightened tensions in the Gulf, with the U.S. set to impose new
sanctions on Iran's crippled economy are keeping investors on
edge," said Marc Chandler, chief market strategist at
Bannockburn Global Forex LLC.
    Both China and the United States should make compromises in
trade talks, Chinese Vice Commerce Minister Wang Shouwen said on
Monday.
    Markets believe that if Washington and Beijing fail to dial
back their heated rhetoric on trade, then the Fed will be forced
to cut interest rates to prevent a wider economic slowdown
resulting from higher U.S. tariffs on imports.
    Interest rates futures implied traders priced in a 100%
chance the Fed would cut rates at the end of July, while they
are betting on a high probability it might lower rates two more
times after that, according to CME Group's FedWatch program.
    Expectations of falling U.S. rates have weakened the
greenback. An index that tracks the dollar against a group of
six currencies fell 1.57% last week, its biggest weekly
loss in four months. At 9:38 a.m. (1338 GMT), the dollar index
dipped 0.1% at 96.126.
    The latest weekly positioning data confirmed the view of a
weakening dollar. 
    Hedge funds have turned mildly bearish on the greenback, and
have increased bets on weakness in other currencies such as the
Australian dollar as their outlook on the global economy has
soured.

    Meanwhile, the yen retreated from its strongest levels
against the dollar since January after President Trump called
off a military strike against Iran but tensions between the two
nations remain high.
    The yen was down 0.18% at 107.495 per dollar after
reaching 107.045 on Friday as nervous traders piled into the
safe-haven currency.
    Among digital currencies, bitcoin was steady at
$10,857.77 after breaking above $11,000 this past weekend on the
Luxembourg-based Bitstamp exchange.

========================================================
    Currency bid prices at 10:08AM (1408 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1378        $1.1366     +0.11%         -0.79%      +1.1398     +1.1363
 Dollar/Yen       JPY=        107.5000       107.3000    +0.19%         -2.50%      +107.5300   +107.2600
 Euro/Yen         EURJPY=     122.34         121.98      +0.30%         -3.07%      +122.3900   +122.0000
 Dollar/Swiss     CHF=        0.9751         0.9762      -0.11%         -0.64%      +0.9782     +0.9744
 Sterling/Dollar  GBP=        1.2715         1.2740      -0.20%         -0.33%      +1.2766     +1.2709
 Dollar/Canadian  CAD=        1.3205         1.3221      -0.12%         -3.17%      +1.3221     +1.3178
 Australian/Doll  AUD=        0.6953         0.6923      +0.43%         -1.39%      +0.6961     +0.6929
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1096         1.1099      -0.03%         -1.40%      +1.1130     +1.1095
 Euro/Sterling    EURGBP=     0.8949         0.8923      +0.29%         -0.39%      +0.8957     +0.8920
 NZ               NZD=        0.6604         0.6587      +0.26%         -1.68%      +0.6615     +0.6582
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.5042         8.4950      +0.11%         -1.56%      +8.5106     +8.4703
 Euro/Norway      EURNOK=     9.6780         9.6627      +0.16%         -2.30%      +9.6860     +9.6493
 Dollar/Sweden    SEK=        9.3198         9.3509      -0.22%         +3.97%      +9.3548     +9.3000
 Euro/Sweden      EURSEK=     10.6074        10.6307     -0.22%         +3.35%      +10.6396    +10.5925
    

    
 (Additional reporting by Saikat Chatterjee in LONDON
Editing by Mark Heinrich and Nick Zieminski)
  
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