FOREX-Dollar stalled awaiting signals on trade and Fed policy

* Dollar little changed in morning trade
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Recasts; adds analyst quote; changes dateline, previous
LONDON)
By Kate Duguid
NEW YORK, May 20 (Reuters) - The dollar was little changed
on Monday morning but maintained last week's gains as investors
held off on big moves while awaiting developments in U.S-China
trade negotiations and for insight into the Federal Reserve's
thinking on interest-rate policy.
China on Monday accused the United States of harboring
"extravagant expectations" for a trade deal, underlining the
gulf between the two sides as U.S. action against Chinese
technology giant Huawei began hitting the global tech sector.
The dollar index .DXY , which measures the
greenback against a basket of six currencies, was down 0.06%,
little moved by the bickering.
Against the euro EUR= , the dollar was slightly weaker,
last down 0.07%.
The dollar was also on hold ahead of Jerome Powell's speech
later Monday, which should offer insight into the Fed chair's
thinking about interest rates and the effects trade tensions may
have on the U.S. economy. On Wednesday, the Federal Open Market
Committee will release minutes from its last meeting, which
investors hope will show what prompted the policymakers to
strike a broadly neutral stance this month.
Powell's speech on Monday "will be something we're watching
very closely to see if there are any comments from the Federal
Reserve as to if they feel there will be a change in their
outlook ... because of the increased trade tensions," and "what
they will be doing going forward," said Chuck Tomes, portfolio
manager at Manulife Asset Management.
At its May 1 meeting, the Fed decided to keep interest rates
steady and signaled little appetite to adjust them any time
soon, taking note of strong job growth. Since then, trade tensions between Washington and Beijing
have escalated, casting a shadow on the outlook of global growth
and fueling expectations the U.S. central bank will have to cut
interest rates in the coming months.
Increased expectations of rate cuts so far have had little
impact on the dollar, though it has found some strength from the
escalating trade tensions as investors have turned to it as a
safe haven. Still, positioning data suggested that strength may
be temporary, as investors have trimmed some of their long
positions in the U.S. currency against both its developed and
emerging market rivals.
Market strategists note the implied yields on U.S. futures
contracts are starting to price in a second rate cut this year
as concerns have mounted.
"As such, these (Fed) minutes will take on added
significance as markets try to figure out the Fed's true
message," said Win Thin, global head of currency strategy at
Brown Brothers Harriman in New York.

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