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FOREX-Dollar, yen tick higher as trade news dries up

Published 20/11/2019, 03:32 pm
© Reuters.  FOREX-Dollar, yen tick higher as trade news dries up
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* Dollar, yen strengthen as China rebukes U.S. over Hong Kong

* Pound slips after inconclusive election debate

* Fed minutes due at 1900 GMT

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

By Tom Westbrook

SINGAPORE, Nov 20 (Reuters) - The dollar and the safe-haven yen edged higher on Wednesday, but not much, as a lack of clarity on U.S.-China trade talks kept investors cautious.

Ahead of the release of minutes from the U.S. Federal Reserve's last policy meeting at 1900 GMT, traders were again reading tea leaves on the trade negotiations' progress.

More upbeat reports hinting that talks were getting down to nuts and bolts were offset by rising tension between the parties over Hong Kong. The U.S. Senate's approval of bills aimed at protecting human rights there drew a sharp rebuke from China.

After falling overnight, the greenback rose 0.2% on the Australian dollar AUD=D3 to $0.6818. It added 0.1% on the New Zealand dollar NZD=D3 to $0.6419, toppling the kiwi from a two-week high.

The dollar was marginally higher against the euro EUR= at $1.1074 and a fraction stronger against a basket of currencies .DXY at 97.889.

The yen JPY= , regarded as a safe-haven by virtue of Japan's status as the world's biggest creditor, touched 108.37 per dollar, its highest since Friday, before settling at 108.47.

"It's a very slightly risk-averse day," said Westpac FX analyst Imre Spiezer. "There's a slightly cautious tone and mixed messages from the trade war negotiations."

The United States and China have been locked in tit-for-tat tariff hikes that have dented the global economy.

Hopes for progress on the dispute had risen overnight when Bloomberg reported that negotiations, which failed in May, would be considered a baseline in deciding what U.S. tariffs on China would be rolled back. they were dashed by another warning form U.S. President Donald Trump of more tariffs if talks collapse and by China's stern response to the passage of two Hong Kong-related bills in the U.S. Senate. proposals - which have not passed the House - would require the U.S. to annually certify the protest-wracked city retained enough autonomy to qualify for trade concessions, and ban exporting crowd-control munitions to Hong Kong police.

China's foreign ministry spokesman called it a blatant interference in China's internal affairs, and said the U.S. faced "negative consequences" if it persisted. another spanner in the works for the trade deal," said Matt Simpson, senior market analyst at Gain Capital in Singapore. He added, though, that markets have become inured to this sort of back and forth after 18 months of trade tensions.

The Chinese yuan - the currency most sensitive to the trade dispute - inched down to a two-week low of 7.0337 per dollar. CNY=

China cut its new benchmark lending rate on Wednesday, as widely expected, moving to drive down funding costs and shore up an economy hurt by slowing demand and trade tariffs. the British pound GBP= extended an overnight drop after an inconclusive election debate between Conservative Prime Minister Boris Johnson, who leads in the polls, and Labour leader Jeremy Corbyn. weakened 0.1% to $1.2909 in Asian trade.

The release of the Fed minutes from October are the next major scheduled event for markets, with investors looking for insight into the reasoning for last month's rate cut.

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