FOREX-Cautious optimism lifts Asian currencies after Sino-U.S. trade deal

* U.S.-China deal seen reducing trade uncertainty
* Kiwi, Aussie firm, yen softens
* Elevated Swiss franc hints at caution remaining
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Jan 16 (Reuters) - Asian currencies inched higher
on Thursday supported by hopes the U.S.-China trade deal could
herald warmer relations between the world's two biggest
economies and help to revive global growth.
"The message is actually very, very simple: Tariffs are not
going up this year. And that's really all we need," said Ken
Peng, Citi's head of Asia investment strategy.
Beijing and Washington touted the Phase 1 deal, signed
overnight at the White House, as a step forward in resolving
their bitter trade dispute. U.S. Vice President Mike Pence fed optimism for further
progress, saying further Phase 2 discussions had already begun.
That put the New Zealand dollar on track for its first
intra-day rise in a week and the kiwi's 0.2% lift led small but
broad-based gains. It last traded at $0.6635 NZD=D3 .
The Chinese yuan, the most sensitive currency to the
U.S.-China trade relationship, drifted back toward a six-month
peak hit on Tuesday, adding 0.1% to 6.8842 per dollar CNY= .
The safe haven Japanese yen JPY= was a fraction softer at
109.92 per dollar, while the Australian dollar held a tad firmer
at $0.6908 AUD=D3 .
The greenback was also marginally lower against the euro
EUR= and pound GBP= , with analysts figuring a bounceback in
the world economy could be negative for the dollar.
Against a basket of currencies .DXY the dollar sat at
97.195, close to a week low.
The centrepiece of the trade deal is a pledge by China to
purchase at least an additional $200 billion worth of U.S. farm
products and other goods and services over two years.
The United States will also cut by half the tariff rate it
imposed on Sept. 1 on a $120 billion list of Chinese goods, to
7.5%.
Yet market exuberance was checked because much of this was
priced in already and because it addresses few of the issues
that led to the trade conflict in the first place.
The agreement does not fully eliminate tariffs. It is vague
on enforcement. It makes no real progress on host of thorny
problems from intellectual and many analysts are sceptical that
the purchase targets are realistic.
The safe-haven Swiss franc's overnight rally to a 15-month
high of 0.9680 per dollar - close to where it held in Asian
trade - points to the level of caution.
"I'm not sure that there's any hidden gold nugget," said
Westpac FX analyst Sean Callow.
"There's a sense of markets having traded off the positive
vibes of the trade agreement for long enough, and it's very hard
to see where the upside is from here," he said.
"If there is a step towards freer trade and lower tariffs,
then it's obviously not going to happen anytime soon."