FOREX-Dollar edges up on positive hopes for Trump trade speech

(Updates prices, adds Cole comment)
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Elizabeth Howcroft
Nov 12 (Reuters) - The dollar was stronger against the yen
and Swiss franc on Tuesday as traders grew optimistic ahead of a
speech by U.S. President Donald Trump, in which he is expected
to delay a tariff decision on European carmakers by six months.
Trump's speech to the Economic Club of New York is expected
to be market-moving as he is scheduled to discuss U.S. trade
policy. Currency traders will be listening for hints about the
Trump administration's long-running trade war with China, and
any progress towards the "phase one" trade deal. "The market has obviously been quite wary about whether a
phase one deal is on or not - a lot of hopes are being placed on
this speech one way or another," said Jane Foley, senior forex
strategist at Rabobank.
"We just don't know which way he's going to go," she said,
as Trump can be "very impulsive" and therefore difficult to
predict.
"I suspect that he will provide just enough encouragement to
indicate that there is reason to be hopeful, without probably
saying that it's a done deal," Foley said.
Versus a basket of currencies, the global dollar index
.DXY rose 0.2%.
The dollar strengthened against safe haven currencies: it
was up 0.1% against both the Japanese yen JPY=EBS and 0.3%
versus Swiss franc CHF=EBS in early London trading.
Adam Cole, chief currency strategist at RBC Capital Markets
said the expectation that the review of tariffs on European
automakers will be postponed by six months was behind the
risk-on move and is now priced in by markets.
The euro hit four-week lows against the dollar, down as much
as 0.2% at $1.10110 EUR=EBS .
The New Zealand dollar was down 0.5% at 0.6334 versus the
U.S. dollar, barely recovered from the low of $0.6323 it reached
last week NZD=D3 after a central bank survey showed the
country's near-term inflation expectations dropped, increasing
traders' expectations of a rate cut this week. The offshore Chinese yuan was flat against the dollar at
around 7, a threshold it crossed for the first time in August
CNH=EBS . The yuan weakened on political unrest in Hong Kong,
as well as because of weak economic data in mainland China.
In Hong Kong, riot police fired tear gas at a university
campus on Tuesday, a day after a protester was shot and a man
set on fire in some of the most dramatic unrest to rock the
Chinese-ruled city in more than five months. The Chinese foreign ministry said that stopping the violence
is the most important thing and that the United States, Britain
and other countries should not interfere. The dollar was boosted last week when comments from the
Chinese trade ministry were interpreted as a sign of progress on
rolling back China-U.S. tariffs, causing traders to dump
safe-haven currencies such as the yen. However, uncertainty hit again on Friday when Trump said
that he had not agreed to reduce tariffs.