FOREX-Dollar holds near one-month high ahead of Fed minutes

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds analyst quotes; updates prices and news; changes
dateline, previous LONDON)
By Kate Duguid
NEW YORK, May 22 (Reuters) - The U.S. dollar held near a
one-month high on Wednesday amid heightened trade tensions
between the United States and China and ahead of the release of
Federal Reserve meeting minutes which may provide more clues on
why the central bank stood pat on interest rates earlier this
month.
At its May 1 meeting, the Federal Open Market Committee kept
interest rates steady and signaled little appetite to adjust
them any time soon, taking note of strong jobs growth.
Still, the minutes may not add much to what the market has
learned from a slew of comments from Fed members this week.
In Hong Kong earlier Wednesday, James Bullard, president of
the Federal Reserve Bank of St. Louis, said further weakness in
inflation could prompt the Fed to cut rates, even if economic
growth maintains its momentum. Bullard's comments echoed those made by other Fed members
this week, including the Chicago Fed's Charles Evans, also a
voting member of the FOMC. "We expect the FOMC minutes from the May meeting to be
rather uneventful for the foreign exchange market, given the
deluge of Fed speak investors have received in recent sessions,"
said Stephen Gallo, European head of foreign exchange strategy
at BMO Capital Markets.
The minutes will not reflect a further ratcheting up of
U.S.-China trade tension since the meeting, which may also limit
its impact on markets.
Officials in the world's two largest economies dug in their
heels as tensions intensified since Washington last week
blacklisted China's Huawei Technologies Co Ltd HWT.UL .
China must prepare for difficult times as the international
situation is increasingly complex, President Xi Jinping said in
comments on Wednesday. "Everyone is digging in for a long fight," Brown Brothers
Harriman strategists said in a note.
Against a basket of rivals, the dollar .DXY was steady at
98.043 and just shy of a one-month high of 98.134.
While investors in risky assets heaved a sigh of relief
after the United States eased trade restrictions on Huawei, the
lack of a significant breakthrough has kept them on edge.
Stronger safe-haven assets, namely the Japanese yen JPY=
and Swiss franc CHF= up 0.12% and 0.23% respectively,
indicated lingering skepticism.
Sterling was the only notable loser going into the North
American session GBP= down 0.57% to its lowest since Jan.4,
and last at $1.263.
Political uncertainty in Britain deepened as Prime Minister
Theresa May's final attempt to seal a Brexit deal failed to win
over opposition lawmakers and many in her own party.
Elsewhere, the euro EUR=EBS was steady at $1.116 before a
speech by European Central Bank chief Mario Draghi in Frankfurt.