(Fixes typo in second paragraph.)
* Yen edges up before US-Japan trade talks
* Sterling falls as no-deal Brexit concern grows
* RBNZ unexpectedly commits to keep interest rates at record lows
* Kiwi slides to lowest since March 2016
By Tom Finn
LONDON, Aug 9 (Reuters) - The dollar gained against most major currencies on Thursday as investors bet that trade war rhetoric and a strong U.S. economy would continue to aid the currency.
Trade tensions are seen as beneficial for the U.S. dollar as the economy is better placed to handle protectionism than emerging markets, and tariffs may narrow the U.S. trade deficit.
But the dollar’s gains have been more pronounced against emerging-market currencies because an escalation in the U.S.-China trade war would hit their export-oriented economies harder.
The dollar index, which tracks the dollar versus a group of six currencies, was up 0.2 percent at 95.345. It rose to a year-high of 95.652 on July 19 but has since struggled to break much above the 95.5 level.
In an apparent reflection of concern among investors about an uptick in geopolitic tensions, including the U.S.-China trade war and Brexit, the Japanese yen rose broadly before falling against a rebounding dollar.
Global foreign exchange markets this summer have been dominated by political angst from U.S. sanctions on Russia and Turkey to rising tensions in the Middle East and in Europe.
The Russian rouble retreated to its lowest since November 2016 overnight, weakening beyond the psychologically important 65 per dollar threshold, after Washington said it would impose fresh sanctions on Moscow .
The Turkish lira touched a record low against the dollar, weakening some 2.5 percent from Wednesday’s close, after a Turkish delegation met U.S. officials to try to resolve disputes between the two NATO allies.
“Politics continues to wreak short-term havoc in global FX markets... where we’re questioning whether any currency is truly safe,” said Viraj Patel, a currency strategist at Dutch bank ING.
Investors were focused on U.S. inflation data due out on Thursday, though few expect it to alter the pace of U.S. interest rate hikes.
“There’s very little scope for further fed tightening. Today the market is being driven by risk aversion, ranges are very tight,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.
Traders are also focusing on talks in Washington on Thursday in which Japan will seek to avert tariffs on its car exports and fend off U.S. demands for a bilateral free-trade agreement.
This year’s global trade row has seen the safe-haven Japanese yen - which appreciates in times of political uncertainty - stay resolutely weak, falling about four percent against the dollar over the past six months.
That has prompted speculation the yen’s depreciation could be an issue in Thursday’s talks. President Donald Trump has voiced concern over countries deliberately weakening their currencies.
The yen on Thursday rose to a 10-day high against the dollar of 110.76 before relinquishing its gains to trade down 0.2 percent at 111.175.
The euro remained in the red at $1.15920, edging back down towards a 2018-low of $1.15080.
KIWI STOOPS TO 2 1/2-YEAR LOW
Sterling on Thursday continued to slide and hit $1.2842 following a drop to $1.2854 the previous day, its lowest in a year.
The pound is weakening as investors ramp up bets Britain will leave the European Union without an agreement with Brussels on their future relationship.
A big mover was the New Zealand dollar, which fell more than 1 percent at $0.6652, its lowest since March 2016.
The kiwi tumbled after the Reserve Bank of New Zealand (RBNZ) on Thursday unexpectedly committed to keeping interest rates at record lows through to 2020 on disappointing economic activity, a dovish turn that caught markets off-guard. (Editing by Richard Balmforth, editing by Larry King)