November 16, 2018 / 4:54 PM / 23 days ago

FOREX-Fed officials' caution weakens dollar, sterling rebounds

    * Fed's Clarida, Kaplan warn of risk of slowing global
growth
    * Dollar hits one-week low vs euro, two-week trough vs yen
    * Sterling recovers as key Brexiteers back UK PM May's plan 
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline; previous LONDON)
    By Richard Leong
    NEW YORK, Nov 16 (Reuters) - The dollar fell broadly on
Friday in the wake of cautious comments from two U.S. Federal
Reserve officials about global economic growth, while sterling
rose following losses tied to fears about a Brexit deal.
    The greenback fell to one-week lows versus the euro and a
two-week trough against the yen following comments from Fed Vice
Chair Richard Clarida, who told CNBC television he saw some
evidence of global growth cooling.
    Clarida also noted key U.S. short-term borrowing rates are
close to neutral and said being at neutral "makes sense."
    Traders perceived his comments to mean the No. 2 Fed
official may be open for the Fed to pause its rate-hike campaign
sooner than previously thought.
    "It's the market's anticipation that the Fed may stop at
neutral," said Paresh Upadhyaya, director of currency strategy
at Amundi Pioneer Investments in Boston.
    Separately, Dallas Federal Reserve President Robert Kaplan
said on Fox Business that global growth will be a bit of a
headwind, which may spread to the United States.
    Clarida and Kaplan's remarks spurred selling in the dollar,
which fell 0.65 against the euro at $1.1405.
    Against the yen, the greenback was down 0.71 at
112.81 yen.
    The dollar also weakened against sterling, reversing some of
Thursday's gains.
    The pound briefly recovered against the euro following its
worst day versus the single currency in about 25 months, as U.K.
Prime Minister Theresa May clinched backing from some key Brexit
supporters with her draft plan for Britain to leave the European
Union in March.
    A string of cabinet ministers quit on Thursday in protest
over the terms in May's Brexit proposal. The resignations sent
the pound reeling.
    Sterling was last up 0.47 percent versus the dollar
at $1.2835 but was down 0.25 percent versus the euro
at 88.89 pence.
    The euro was also bolstered by hopes that Italian Prime
Minister Giuseppe Conte was looking to work with the EU over his
government's 2019 budget, which has been rejected by Brussels.  
 
    Meanwhile, currency traders are keeping an eye on concrete
signs that Washington and Beijing are seeking to de-escalate
their trade dispute.
    A Financial Times report on Thursday said U.S. Trade
Representative Robert Lighthizer had told some industry
executives that another round of U.S. tariffs on Chinese imports
had been put on hold. A U.S. Trade Representative spokesperson
later denied the report.    
    The yuan in offshore trading was steady at 6.9235
per dollar. 
========================================================
    Currency bid prices at 11:31AM (1631 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1405        $1.1326     +0.70%         -4.93%      +1.1412     +1.1321
 Dollar/Yen       JPY=        112.8100       113.6200    -0.71%         +0.12%      +113.6400   +112.6800
 Euro/Yen         EURJPY=     128.67         128.74      -0.05%         -4.82%      +128.7700   +128.1500
 Dollar/Swiss     CHF=        1.0007         1.0069      -0.62%         +2.71%      +1.0087     +1.0008
 Sterling/Dollar  GBP=        1.2842         1.2774      +0.53%         -4.96%      +1.2877     +1.2761
 Dollar/Canadian  CAD=        1.3154         1.3175      -0.16%         +4.59%      +1.3186     +1.3127
 Australian/Doll  AUD=        0.7313         0.7276      +0.51%         -6.26%      +0.7319     +0.7251
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1415         1.1405      +0.09%         -2.34%      +1.1434     +1.1399
 Euro/Sterling    EURGBP=     0.8878         0.8866      +0.14%         -0.06%      +0.8889     +0.8826
 NZ Dollar/Dolar  NZD=        0.6857         0.6830      +0.40%         -3.22%      +0.6861     +0.6800
 Dollar/Norway    NOK=        8.4413         8.4878      -0.55%         +2.86%      +8.4949     +8.4259
 Euro/Norway      EURNOK=     9.6304         9.6173      +0.14%         -2.23%      +9.6356     +9.6033
 Dollar/Sweden    SEK=        9.0122         9.0624      +0.10%         +9.88%      +9.0710     +8.9986
 Euro/Sweden      EURSEK=     10.2800        10.2700     +0.10%         +4.48%      +10.2880    +10.2598
    

 (Additional reporting by Tom Finn, Tommy Wilkes in London;
Editing by Andrew Roche and Dan Grebler)
  
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