July 13, 2018 / 2:23 PM / 4 months ago

FOREX-Dollar hits 2-week high on U.S.-China trade fears

    * Yen falls to six-month low against dollar 
    * Record Chinese trade surplus stokes U.S.-China tariff
concern
    * Powell's upbeat remarks add to greenback's strength
    * Fed to release U.S. monetary policy report at 11 a.m. 

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, July 13 (Reuters) - The dollar rose on Friday to a
two-week peak against a basket of currencies after data showing
a record Chinese trade surplus, which may add fuel to U.S.-China
trade tensions, spurring more investors to pile into the safety
of the greenback.
    Upbeat comments on the U.S. economy from Federal Reserve
Chairman Jerome Powell also stoked demand for the dollar,
analysts said.
    The yen fell to a six-month trough against the greenback.
The euro and yuan also weakened against the U.S. currency.
    "It's hard to see what's going to dethrone the dollar," said
Paresh Upadhyaya, director of currency strategy at Amundi
Pioneer Investments in Boston.
    "Trade war concerns amplify the downside risk on global
growth. That tends to be positive for the dollar and puts a drag
on other currencies," Upadhyaya said.
    At 10:09 a.m. (1409 GMT), an index that tracks the dollar
against the yen, euro and four other currencies rose 0.2
percent to 94.988 after touching 95.241 earlier, which was the
highest since June 29.
    The yen hit a six-month low at 112.79 yen per dollar
before recovering to 112.51 yen. 
    The euro fell to a nine-day low at $1.1610, while the
yuan fell half a percent in offshore markets to as low as
6.7250, near an 11-month trough of 6.7326 on July 3. 
    U.S. Treasury Secretary Steven Mnuchin said on Thursday that
the United States and China might reopen trade talks, briefly
easing concerns about the trade dispute. 
    But data showing China's trade surplus with the United
States swelled to a record in June could further inflame
tensions. U.S. President Donald Trump this week pledged to
impose tariffs on $200 billion more in Chinese imports. Beijing
has vowed to retaliate.
    Escalating trade tensions have not dented the U.S. economy,
which on is its second longest expansion on record.
    On Thursday, Fed chief Powell said in a Marketplace radio
interview he believes the U.S. economy remains in a "good
place," with recent government tax and spending programs likely
to boost growth for perhaps three years.  
    "Powell's comments have provided more upward pressure on the
dollar overnight into this morning," Upadhyaya said.  
    The Fed will release its semiannual report on monetary
policy at 11 a.m. (1500 GMT) before Powell's testimony before
Congress next Tuesday and Wednesday.
========================================================
    Currency bid prices at 10:16AM (1416 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1646        $1.1671     -0.21%         -2.92%      +1.1675     +1.1613
 Dollar/Yen       JPY=        112.4900       112.5500    -0.05%         -0.16%      +112.7900   +112.4300
 Euro/Yen         EURJPY=     131.02         131.31      -0.22%         -3.08%      +131.5200   +130.8200
 Dollar/Swiss     CHF=        1.0042         1.0022      +0.20%         +3.07%      +1.0068     +1.0016
 Sterling/Dollar  GBP=        1.3172         1.3204      -0.24%         -2.52%      +1.3209     +1.3104
 Dollar/Canadian  CAD=        1.3174         1.3151      +0.17%         +4.75%      +1.3208     +1.3152
 Australian/Doll  AUD=        0.7389         0.7406      -0.23%         -5.28%      +0.7422     +0.7369
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1695         1.1696      -0.01%         +0.05%      +1.1708     +1.1659
 Euro/Sterling    EURGBP=     0.8838         0.8835      +0.03%         -0.51%      +0.8867     +0.8836
 NZ Dollar/Dolar  NZD=        0.6742         0.6783      -0.60%         -4.85%      +0.6786     +0.6727
 Dollar/Norway    NOK=        8.1439         8.1051      +0.48%         -0.77%      +8.1697     +8.1045
 Euro/Norway      EURNOK=     9.4846         9.4640      +0.22%         -3.70%      +9.4940     +9.4501
 Dollar/Sweden    SEK=        8.9203         8.8687      +0.42%         +8.76%      +8.9390     +8.8590
 Euro/Sweden      EURSEK=     10.3900        10.3470     +0.42%         +5.60%      +10.3935    +10.3381
    

    
 (Additional reporting by Tommy Wilkes in LONDON
Editing by Louise Ireland and Jonathan Oatis)
  
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