* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Bounce by U.S. yield from 8-wk lows, Sino-U.S. woes
support USD
* RBA Lowe says c.bank to consider June cut, Aussie slips
* Powell: early to judge trade, tariff impact on monetary
policy
(Adds details and quotes, updates prices)
By Shinichi Saoshiro
TOKYO, May 21 (Reuters) - The dollar was steady near a
2-1/2-week high on Tuesday, supported by higher U.S.-yields and
its safe-haven status, with growing worries that the U.S.-China
trade war could worsen following Washington's crackdown on
China's Huawei Technologies.
The dollar index against a basket of six major currencies
.DXY was a shade higher at 97.965 after brushing 98.036
overnight, its highest since May 3.
Global equities have taken a hit this week, with share
prices in chipmakers falling in the wake of the U.S. moves
against Huawei. MKTS/GLOB
"The dollar has established itself as a safe-haven and it
attracts demand in times like this, with equities falling and
market volatility rising," said Takuya Kanda, general manager at
Gaitame.Com Research Institute.
"The bounce by Treasury yields is another factor supporting
the dollar. The recent drop by the 10-year yield seemed
overdone, and with Fed's Powell not providing clear hints of a
rate cut this year, the rebound in yields could continue for a
while."
Federal Reserve Chair Jerome Powell said on Monday that it
was premature to make a judgement about the impact trade and
tariff issues could have on monetary policy. The 10-year Treasury note yield US10YT=RR extended its
overnight rebound and brushed an eight-day high of 2.428%. The
yield had dropped to 2.354% last week, its lowest since March
28, after weak U.S. retail sales data increased rate cut
expectations.
"Among industrialised nations, only Italy has a higher
10-year yield than the United States. Under such conditions,
buyers have little choice but to turn to the dollar," said
Daisuke Karakama, chief market economist at Mizuho Bank.
The 10-year Italian government bond IT10YT=RR yielded
2.705%, driven up by domestic political uncertainty and the
country's rising debt. The 10-year German and Japanese yields
stood at minus 0.088% DE10YT=RR and minus 0.05%
JP10YTN=JBTC , respectively.
The euro was flat at $1.1165 EUR= after slipping to
$1.1150 the previous day, its lowest since May 3. The single
currency is expected to remain on a nervous footing through the
May 23-26 European parliamentary election.
The dollar was 0.15% firmer at 110.195 yen JPY= , in
touching distance of a two-week high of 110.320 scaled the
previous day.
AUSSIE'S ADVANCE CUT SHORT
The Australian dollar AUD=D4 was 0.25% lower at $0.6891,
its earlier advance fizzling out after Reserve Bank of Australia
Governor Philip Lowe said on Tuesday that the central bank will
will consider the case for lower interest rates at its June
policy meeting. A cut would be the first since the RBA's last easing to a
record low 1.50% in August 2016.
The Aussie had gained nearly 0.6% the previous day on a
surprise election win by the country's conservative government.
Investors had regarded the opposition Labor Party's economic
policies as less business-friendly, and their relief at Labor's
unexpected defeat drove a rally in Australian markets.
(Editing by Simon Cameron-Moore)