FOREX-Dollar jumps on worries over U.S.-China trade talks

Reuters

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    * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

 (Recasts; adds trade news, analyst quotes; changes dateline;
previous LONDON)
    By Kate Duguid
    NEW YORK, Feb 11 (Reuters) - The dollar jumped on Monday as
concerns grew that the latest round of U.S.-China talks may not
yield a deal between the world's largest economies before the
March deadline.
    The greenback is headed for an eighth consecutive day of
gains, lifted by its safe-haven appeal as investors, worried
about the economic fallout from an ongoing trade war and a
global economic slowdown, pile into the world's most liquid
currency. 
    High-level talks in Beijing this week are a leading focus
for investors, many of whom see little prospect for a trade deal
and instead expect an extension of the March 1 deadline for
deciding whether to increase tariffs.  urn:newsml:reuters.com:*:nL1N2030ZH 
    On "the trade process, and the hope that China will buy more
U.S. goods, we might see some headlines supportive of a warming
in trade talks. But there are also the intellectual property and
tech transfer issues and we have not seen any progress on that
front and I'm not sure we will this week," said Juan Prada,
currency strategist at Barclays in New York.
    The United States is expected to keep pressing China on
longstanding demands that it reform how it treats U.S.
companies' intellectual property in order to seal a trade deal
that could prevent tariffs from rising on Chinese
imports. urn:newsml:reuters.com:*:nL3N20614C
    Monday morning's move in the dollar reverberated across
currency markets, driving the euro to its lowest since Dec. 14
at $1.127  EUR= . The dollar strengthened to 110.45 Japanese yen
 JPY=  and to $1.286 against the British pound  GBP= . 
    Emerging market and China-sensitive currencies such as the
Australian dollar are most likely to be affected by the trade
news.
    "The market was positioned in a more bearish way with
respect to the dollar, so we had stronger emerging markets in
the past month. This is a retracement of what we have seen from
that," said Prada.   
    The dollar's recent strength has emerged despite the Federal
Reserve striking a cautious tone at its policy meeting in
January. 
    "The U.S. currency is currently in demand as a safe haven.
This is reflected in the fact that the Swiss franc and the
Japanese yen – also typical safe-haven currencies – have also
been able to appreciate since the start of the month," said Thu
Lan Nguyen, an FX strategist at Commerzbank in Germany. 
    The dollar index  .DXY , a gauge of its value versus six
major peers, was 0.44 percent higher at 97.067.
    China markets reopened on Monday morning after a one-week
holiday break, with the dollar last 0.71 percent higher versus
the yuan  CNY=  at 6.791.

 (Reporting by Kate Duguid and Tom Finn; Editing by Dan Grebler)
 ((kate.duguid@thomsonreuters.com; +646-223-6118; Reuters
Messaging: kate.duguid@thomsonreuters.com@thomsonreuters.net))

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