November 5, 2019 / 2:52 PM / a month ago

FOREX-Safe-haven yen, Swiss franc fall on U.S.-China trade deal optimism

    * China pushes U.S. to roll back some tariffs
    * China pares lending rates by 5 basis points
    * Chinese yuan holds gains vs U.S. dollar even after rate
cut
    * Aussie dollar rises vs dollar as risk appetite rises
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Recasts, adds new comment, FX table, updates prices, changes
byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Nov 5 (Reuters) - The safe-haven yen and Swiss
franc slid on Tuesday, as growing signs the United States and
China are inching closer to a trade deal boosted risk appetite
and spurred investors to seek higher-yielding currencies.
    On the flip side, trade-oriented currencies including the
Australian dollar surged, with the Chinese currency climbing to
a three-month high against the greenback. 
    A decision by the Chinese central bank to trim lending rates
by only 5 basis points also increased overall risk-taking.
    China is pushing U.S. President Donald Trump to remove more
tariffs imposed in September as part of a "phase one" U.S.-China
trade deal, which is expected to be signed later this month,
people familiar with the negotiations said.
    "The prospects that the U.S.-China deal could include some
rolling back of existing U.S. tariffs helped underpin risk
appetites," said Marc Chandler, chief market strategist at
Bannockburn Global Forex in New York.
    In mid-morning trading, the U.S. dollar rose 0.3% against
the yen to 108.94 yen, and was up 0.4% versus the Swiss
franc at 0.9918.
    The yen and Swiss franc tend to strengthen in times of
geopolitical tension and financial stress.
    Gains against the yen and Swiss franc pushed the dollar
index up 0.3% to 97.774.
    The yuan traded in the offshore market jumped to its
strongest level since Aug. 5 at 6.9838. The onshore
yuan also posted its strongest close since Aug. 2..

    The currency held its gains even after China's central bank
cut its one-year medium-term lending facility (MLF) rate for the
first time since early 2016, though it opted for a 5 bps cut,
which Commerzbank called "tiny.".
    China and the United States have imposed tariffs on each
other's goods in a trade war that has dragged on for 16 months
and raised the specter of a global recession.
    Kit Juckes, head of FX strategy at Société Générale, said
the agreement would probably mark a truce rather than peace but
added that "the chance of getting a first-stage deal seems to be
quite good."
    The optimism spilled over into other currencies, with the
Australian dollar close to recent three-month highs and
the highest versus the yen since the end of July. It
was not much moved after the central bank left monetary policy
unchanged, as expected. The New Zealand dollar rose
0.3%. 
    The euro, however, was down 0.4% against the dollar at
$1.1091.
    Societe Generale's Juckes said the euro would be one of the
last currencies to benefit from improved risk sentiment, noting
that Monday's data showing Polish manufacturing activity in its
sharpest downturn in 10 years had taken the wind out of the
euro's sails. 
    Central European states such as Poland are a key market and
investment destination for euro zone companies.
    
    ========================================================
    Currency bid prices at 9:29AM (1429 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1091        $1.1126     -0.31%         -3.30%      +1.1140     +1.1087
 Dollar/Yen       JPY=        108.9200       108.5600    +0.33%         -1.22%      +108.9400   +108.5700
 Euro/Yen         EURJPY=     120.82         120.81      +0.01%         -4.28%      +121.2900   +120.7700
 Dollar/Swiss     CHF=        0.9915         0.9876      +0.39%         +1.03%      +0.9922     +0.9877
 Sterling/Dollar  GBP=        1.2883         1.2882      +0.01%         +0.99%      +1.2916     +1.2877
 Dollar/Canadian  CAD=        1.3136         1.3149      -0.10%         -3.67%      +1.3161     +1.3112
 Australian/Doll  AUD=        0.6902         0.6883      +0.28%         -2.09%      +0.6928     +0.6877
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1000         1.0990      +0.09%         -2.26%      +1.1029     +1.0987
 Euro/Sterling    EURGBP=     0.8607         0.8636      -0.34%         -4.20%      +0.8645     +0.8604
 NZ               NZD=        0.6401         0.6401      +0.00%         -4.70%      +0.6431     +0.6392
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.1615         9.1447      +0.18%         +6.05%      +9.1669     +9.1036
 Euro/Norway      EURNOK=     10.1633        10.1760     -0.12%         +2.60%      +10.1777    +10.1348
 Dollar/Sweden    SEK=        9.6481         9.6222      -0.04%         +7.63%      +9.6530     +9.5841
 Euro/Sweden      EURSEK=     10.7029        10.7076     -0.04%         +4.27%      +10.7118    +10.6720
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Elizabeth Howcroft in London)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below