FOREX-Dollar consolidates gains amid cautious optimism on tariff deal

* Dollar holds ground won last week
* Investor focus on U.S-China trade deal
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Westbrook
SINGAPORE, Nov 11 (Reuters) - The dollar held near
multi-week highs on Monday amid optimism that the United States
and China would roll back tariffs that have hurt global growth.
Against the Australian dollar AUD=D3 the greenback stood
just below a two-week peak at $0.6857. Against the New Zealand
dollar NZD=D3 , it was close to a month high at $0.6336, and
likewise against a basket of currencies .DXY at 98.358.
Moves were slight as traders kept a wary eye for further
news on the U.S.-China trade war.
Officials from both countries said late last week that a
rollback of some tit-for-tat tariffs had been agreed.
Even though that was subsequently denied by U.S. President
Donald Trump on Friday, he did not completely rule out a deal
and U.S. benchmark treasuries held above a key support level at
1.9%, buoying the currency.
"He's left the door open to some (tariff) rollbacks," said
Rodrigo Catril, a senior FX strategist at National Australia
Bank in Sydney.
"The market has latched on to the idea that there's
definitely the prospect that some will be done," he said.
"Everyone is looking to price in the improvement in the
global growth outlook," he added, pointing out that future
improvement was further supported by an altogether positive
earnings season from U.S. companies.
The dollar was marginally weaker against the euro EUR= and
Japanese yen JPY= , reflecting some investor caution that the
deal could still unwind.
The greenback stood at $1.1020 per euro and at 109.23 yen.
The Chinese yuan was marginally weaker in offshore trade, but
still on the strong side of 7-per-dollar at 6.9892 in offshore
trade. CNH=
"The world wants to be long risk and short volatility into
any impending meeting between Trump and (Chinese President) Xi,
but will they get what they want?" said Chris Weston, strategist
at Melbourne brokerage Pepperstone.
"Tactically if we get an agreement, do we then see a
classic buy the rumour, sell the fact scenario play out? I see
this as a material risk."
With the United States on holiday for Veterans Day, focus is
likely to be on news headlines, British economic data due later
on Monday and a rate-setting meeting of the New Zealand central
bank later in the week.
Britain's economy has lost momentum this year, hurt by a
global downturn due to the U.S.-China trade war as well as
increased uncertainty over its exit from the European Union.
It is forecast to have grown 0.4% for the quarter.
The British pound GBP= , whose fate is now closely tied to
the outcome of an election set for Dec. 12, edged higher to
$1.2795 in Asian trade.
"The latest poll of polls show the Conservative party's lead
is widening," Commonwealth Bank of Australia analyst Jos Capurso
said in a note. "If this trend continues, GBP will edge higher
in the near term."