FOREX-Aussie dollar up on hopes of US-China trade deal, sterling surges on Brexit deal hopes

* Euro up vs dollar as risk appetite returns
* Swedish, Norwegian crowns rise after major falls
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds new quotes, updates prices and latest news developments)
By Olga Cotaga
LONDON, Oct 11 (Reuters) - The Australian dollar and Chinese
yuan, often seen as barometers of investor risk appetite, rose
Friday on hopes of progress in U.S.-China trade talks, while
optimistic comments about the prospects of a possible Brexit
divorce deal boosted sterling.
Top U.S. and Chinese negotiators wrapped up their first day
of trade talks on Thursday, with U.S. President Donald Trump
welcoming what he called a "very, very good negotiation with
China".
Business groups expressed optimism the two sides might be
able to de-escalate their trade war, which has sapped economic
growth around the globe. A Chinese newspaper said on Friday that a "partial" trade
deal would benefit China and the United States, reflecting
Beijing's aim of cooling the row before more U.S. tariffs kick
in. "Markets are increasingly narrowly driven, this means that
every piece of good news is going to propel markets strongly
higher. Currently investors are very optimistic about the
U.S.–China trade negotiations as well potential Brexit
resolution," said Marija Veitmane, multi-asset strategist at
State Street.
"However, we are yet to see concrete details on either deal.
We expect markets to sell off sharply should those hopes be
disappointed," she added.
The Australian dollar was up 0.5% at 0.6796 per U.S. dollar
AUD=D3 after rising to a two-week high of 0.6804 overnight.
The yuan was also higher at 7.0938 against the greenback
after hitting a three-week high in the Asian trading session of
7.0890 CNH=EBS .
The safe-haven yen JPY=EBS on the other hand slipped to
108.28 per dollar, its weakest since Oct. 1, as investors' risk
appetite improved.
The Swedish crown, which has been beaten up by the prospects
of dismal global economic growth as result of trade tensions,
got pushed up to a four-day high of 10.8065 against the euro
EURSEK=D3 , though its long-term weak trend remains unbroken
for now.
The euro edged up 0.3% to $1.1033 EUR=EBS , mirroring the
three-week high it reached on Thursday against the dollar, which
usually appreciates as a safe-haven currency when trade
relationships worsen.
Sterling surged to a three-month high of $1.2589 GBP=D3
and a five-month high of 87.65 pence against the euro
EURGBP=D3 on the back of "constructive" talks in Brussels
between British and European Union Brexit negotiators.
"Good news is always welcome, but at this stage it remains
just that: news," said Dean Turner, an economist at UBS Wealth
Management.
"The chances of a deal seem to have improved and the pound
has moved accordingly but hurdles still remain. Time to thrash
out the details of the deal is tight, and then there is the
question of parliamentary approval," Turner said.