FOREX-Safe-haven currencies under pressure as stimulus hopes grow

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Risk sentiment improves on global stimulus hopes
* Huawei decision could make or break currency market mood
* Traders weigh policymakers' response to trade war

By Stanley White
TOKYO, Aug 19 (Reuters) - Safe-haven currencies such as the
yen and Swiss franc were under pressure on Monday as
expectations policymakers would unleash new stimulus eased
immediate concerns about a slowing global economy.
Such hopes found support from the Chinese central bank's
interest rate reforms over the weekend, seen lowering corporate
borrowing costs, and reports of new fiscal stimulus in Germany.
However, investor optimism is likely to be capped ahead of a
U.S. decision due later on Monday on whether to continue to
allow China's Huawei Technologies to buy supplies from American
companies.
"Huawei is a big test to see whether the current risk-on
mood will continue in the currency market," said Takuya Kanda,
general manager of the research department at Gaitame.com
Research Institute.
"There's a sense of calm right now because the stimulus
story is supporting the dollar against safe-havens, but I'm not
sure how long this calm will last."
The dollar index .DXY , which measures the greenback
against six major currencies, was marginally higher in Asia at
98.192, close to a two-week high of 98.339 reached on Friday.
Against the yen JPY=EBS , the dollar was little changed at
106.44 yen, near a one-week high of 106.98 yen.
The yen, which tends to be bought as a safe-haven during
times of economic uncertainty, fell slightly on Monday versus
the antipodean currencies.
Risk sentiment could improve further if the U.S. government
offers some concessions to Huawei, which makes a resolution to
the trade war more likely.
In May, the U.S. government blacklisted Huawei, accusing the
world's largest telecom equipment maker of espionage and
intellectual property theft. The allegations, which Huawei
disputes, were a serious escalation in the U.S.-China trade war.
The U.S. Commerce Department is expected to extend a
reprieve given to Huawei Technologies that permits the Chinese
firm to buy supplies from U.S. companies so that it can service
existing customers, two sources familiar with the situation told
Reuters on Friday. However, U.S. President Donald Trump on Sunday said he did
not want the United States to do business with China's Huawei or
national security reasons, casting doubt over the decision.
While a rejection for Huawei could easily fuel another bout
of risk aversion, risk-sensitive currencies appeared to have
found some support for now.
The Australian dollar rose 0.2% to 72.21 yen AUDJPY= ,
while the New Zealand dollar rose 0.1% to 68.36 yen NZDJPY= .
Gold, another safe-haven asset, fell 0.3% in the spot market
XAU= to $1,509.30 per ounce.
The People's Bank of China unveiled a key interest rate
reform on Saturday to help steer borrowing costs lower for
companies and support a slowing economy that has been hurt by
the trade war with the United States. Details of Chinese stimulus came after German media reported
that the German government may be open to running a fiscal
deficit to boost growth.
China and Germany are two major global exporters that play a
crucial role in world trade, so any steps to bolster these two
economies is a positive for the global economic outlook.