FOREX-Dollar holds awaiting signals on trade, Fed policy

(Adds analyst quotes; updates prices)
By Kate Duguid
NEW YORK, May 20 (Reuters) - The U.S. dollar was roughly
unchanged Monday as investors held off on making big moves while
awaiting developments in U.S-China trade negotiations and
insight into the Federal Reserve's thinking on interest-rate
policy.
The dollar was 0.07% weaker against the euro EUR= , last at
$1.116, but maintained gains made last week. It ignored trade
bickering which saw China on Monday accuse 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.
"There is no clean single headline that you can point to
that summarizes the day's price action," said Richard
Franulovich, head of foreign exchange strategy at Westpac
Banking Corp. Although the dollar was weaker against the euro,
the Japanese yen and the Swiss franc, "These aren't big moves.
You really have to squint."
Foreign exchange traders were also waiting to hear Jerome
Powell's speech later Monday, which could 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 will be dissected for clues on the policymakers'
decision to strike a broadly neutral stance earlier 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," said Chuck
Tomes, portfolio manager at Manulife Asset Management.
Remarks by several members of the Fed on Monday contributed
to the market's lack of conviction, as they showed a diversity
in opinion at the U.S. central bank, said Franulovich.
"If (low inflation) turns out to be persistent, I'll get
more aggressive in pushing the FOMC to lower rates in reaction
and try to recenter inflation expectations at 2%," St. Louis Fed
President James Bullard said in an interview with Handelsblatt.
(https:// Meanwhile, Atlanta Fed President Raphael Bostic is not
expecting an imminent interest rate cut and is confident in the
economy, he told CNBC in an interview on Monday. Elsewhere, the Japanese yen JPY= was 0.09% stronger
against the dollar, last priced at 109.96 yen. The Swiss franc
CHF= , which like the yen serves as a safe-haven investment in
moments of global tumult, was 0.23% stronger, last at 1.008
against the dollar.

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