August 30, 2018 / 3:17 PM / a month ago

FOREX-Dollar gains on U.S.-China trade concerns, emerging market woes

    * U.S. tariffs on China could take effect next month
    * U.S. data dollar-supportive overall
    * Argentina central bank hikes interest rates to 60 percent
    * Emerging market currencies drop
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Recasts, updates prices, adds comments, changes byline,
dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Aug 30 (Reuters) - The dollar rose on Thursday for
the first time in five days, as risk appetite eased and stocks
gave up gains notched early in the week, amid nagging concerns
about U.S. threats to impose additional tariffs on Chinese
imports next month.
    Heavy losses in emerging market currencies have also
benefited the dollar.
    "The market tone is generally risk-off and supportive of
haven assets," said Joe Manimbo, senior market analyst at
Western Union Business Solutions in Washington.
    "Markets are cautiously hopeful that a deal may be near for
a new NAFTA (North American Free Trade Agreement). Yet a trade
deal between the U.S. and China ... remains elusive," he added.
    President Donald Trump has threatened 25 percent tariffs on
a $200 billion list of Chinese imports because of China's
retaliatory tariffs on $50 billion worth of U.S. products in the
two countries' escalating trade war. The U.S. tariffs are
expected to take effect in late September after a public comment
period ends on Sept. 5.
    In late morning trading, the dollar index rose 0.2 percent
 to 94.827.  
    The United States and Canada, meanwhile, expressed optimism
on Wednesday that they could reach a new NAFTA deal by a Friday,
though Ottawa said a number of tricky issues remained.

    The Canadian dollar, however, pulled back from a 2-1/2-month
peak hit two days ago versus the dollar, dropping 0.5 percent to
77 U.S. cents.
    The dollar was also supported by data showing U.S. consumer
spending, which accounts for more than two-thirds of U.S.
economic activity, rose 0.4 percent last month.
    With demand strong last month, consumer prices continued
their gradual upward trend. The personal consumption
expenditures (PCE) price index excluding the volatile food and
energy components rose 0.2 percent.
    "High-frequency data in ... the United States continues to
present a compelling case for monetary tightening - and will
keep the central bank on course to hike rates through the autumn
months," said Karl Schamotta, director of global product &
market strategy at Cambridge Global Payments in Toronto.
    Sharp drops in emerging market currencies have also helped
the dollar's cause, with declines in the Argentine peso leading
the way. Argentina's central bank on Thursday yanked up its
benchmark interest rate to 60 percent from 45 percent in a bid
to control inflation running at more than 31 percent, as the
country's currency plummeted 15.6 percent to a record low 39
pesos per U.S. dollar.
    Other emerging currencies were also weaker against the
dollar, The Mexican peso fell 0.8 percent, while the
South African rand dropped 1.3 percent.
    
    ========================================================
    Currency bid prices at 10:52AM (1452 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1657        $1.1706     -0.42%         -2.83%      +1.1718     +1.1645
 Dollar/Yen       JPY=        111.3600       111.6500    -0.26%         -1.16%      +111.7500   +111.3000
 Euro/Yen         EURJPY=     129.84         130.74      -0.69%         -3.95%      +130.8600   +129.7000
 Dollar/Swiss     CHF=        0.9708         0.9705      +0.03%         -0.36%      +0.9715     +0.9687
 Sterling/Dollar  GBP=        1.3011         1.3024      -0.10%         -3.71%      +1.3043     +1.2986
 Dollar/Canadian  CAD=        1.2970         1.2902      +0.53%         +3.13%      +1.2999     +1.2903
 Australian/Doll  AUD=        0.7280         0.7308      -0.38%         -6.68%      +0.7314     +0.7276
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1316         1.1360      -0.39%         -3.19%      +1.1368     +1.1312
 Euro/Sterling    EURGBP=     0.8957         0.8986      -0.32%         +0.83%      +0.8993     +0.8954
 NZ               NZD=        0.6650         0.6715      -0.97%         -6.15%      +0.6716     +0.6646
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.3392         8.3290      +0.12%         +1.61%      +8.3585     +8.3076
 Euro/Norway      EURNOK=     9.7236         9.7545      -0.32%         -1.27%      +9.7760     +9.7155
 Dollar/Sweden    SEK=        9.1271         9.1362      -0.52%         +11.29%     +9.1562     +9.0965
 Euro/Sweden      EURSEK=     10.6420        10.6978     -0.52%         +8.16%      +10.7060    +10.6340
 
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London)
  
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