FOREX-Dollar rises vs. yen on trade deal hopes

Reuters

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    * China open to partial trade deal -Bloomberg
    * Sterling falls after report of EU concession on Brexit is
denied

 (Updates with afternoon trading)
    By Saqib Iqbal Ahmed
    NEW YORK, Oct 9 (Reuters) - The U.S. dollar rose to a
one-week high against the safe-haven Japanese yen on Wednesday
on revived hopes for an amicable resolution to the U.S.-Chinese
trade war, after a report that China is still open to agreeing
to a partial trade deal with the United States. 
    The report, from Bloomberg, cited an official with direct
knowledge of the trade talks. 
    It comes a day after trade tensions flared again after the
U.S. State Department said it has imposed visa restrictions on
Chinese government and Communist Party officials it believes
responsible for the detention or abuse of Muslim minorities in
Xinjiang province.
    Separately, the Financial Times newspaper reported that
Chinese officials are offering to increase annual purchases of
U.S. agricultural products as the two countries seek to resolve
their trade dispute.  urn:newsml:reuters.com:*:nL5N26U2XD
    Vice Premier Liu He, China's top trade negotiator, is
scheduled to travel to Washington for their next round of trade
talks on Thursday and Friday.
    "Risk appetite is definitely alive and well," said Alfonso
Esparza, senior currency analyst at OANDA in Toronto.
    Against the yen, which tends to strengthen during times of
geopolitical stress due to Japan's standing as the world's
biggest creditor, the greenback was 0.43% higher at 107.53 yen.
 JPY= 
    The greenback climbed 0.3% against the Swiss franc, another
currency investors deem a safe haven.  CHF= 
    Still, some analysts advocated caution on the latest bout of
optimism around the U.S.-China trade talks.
    "The Trump administration’s decision to impose visa bans on
Chinese officials linked to abuses, blacklist some Chinese high
tech companies and a ban on U.S. pension funds investing in 
China hardly make for a positive backdrop to the trade talks,
especially considering that China has yet to respond to the U.S.
moves," said Shaun Osborne, chief market strategist at
Scotiabank in Toronto.
    The dollar index  .DXY , which measures the greenback
against a basket of other currencies, was about flat on the day.
    Most Federal Reserve policymakers supported the need for an
interest rate cut in September, minutes of the central bank's
last policy meeting showed, but they remain increasingly divided
on the path ahead for monetary policy.
    "It was very neutral. You can still see the divide between
the hawks and the doves," Esparza said.
    "They are in somewhat agreement that the U.S. economy is
growing. It's just what comes next, where the two differ," he
said.
    Meanwhile, sterling erased earlier gains on Wednesday after
the Northern Irish party that supports the British government
said it would emphatically oppose a reported European Union
concession on the Irish backstop under any Brexit deal.
 urn:newsml:reuters.com:*:nL5N26U1UD
    The pound was 0.05% lower against the dollar at $1.2211,
after rising as high as $1.229.  GBP= 
    

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Graphic: World FX rates in 2019    http://tmsnrt.rs/2egbfVh
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 (Reporting by Saqib Iqbal Ahmed in New York
Editing by Steve Orlofsky and Matthew Lewis)
 ((saqib.ahmed@thomsonreuters.com; @SaqibReports; +1 646 223
6054; Reuters Messaging:
saqib.ahmed.thomsonreuters.com@reuters.net))

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