FOREX-Dollar down versus euro, pound as trade talks continue

(New throughout; updates dateline, previous LONDON)
By Kate Duguid
NEW YORK, Nov 15 (Reuters) - The dollar was lower on Friday
morning in the North American session as some optimism for the
ongoing trade talks with China bolstered trade-linked currencies
like the euro and the British pound.
Hopes that the United States and China may soon end their
trade war after White House economic advisor Larry Kudlow said a
deal was "getting close" lifted trade-exposed currencies on
Friday at the expense of safe-haven assets such as the Japanese
yen. Given the lack of concrete detail in Kudlow's comments,
however, markets mostly stayed cautious. "To be blunt, such rhetoric is more or less the same as
Steven Mnuchin (who) said months ago that a deal was '99%
done'," Commerzbank analysts wrote in a note to clients, though
they acknowledged the comments had benefited sentiment.
They said the comments could not be taken seriously until
the trade documents could be assessed and a deal was signed.
The dollar fell 0.26% against the euro EUR= and 0.24%
against the British pound GBP= , at $1.105 and $1.291
respectively. It rose 0.3% versus the yen JPY= , last at
108.71, suggesting an end to the past week's dollar-yen slump
may be in sight. The Swiss franc also weakened
0.16% versus the dollar CHF= .
But bleak Chinese data earlier in the week were still
bolstering hopes for a deal, some analysts argued.
"The belief is that perhaps, even though the numbers in the
United States are barely expansionary ... the fact that China is
slowing down means that there is perhaps economic leverage on
the U.S. side and that China will sign on to whatever," said
Juan Perez, senior foreign exchange trader and strategist at
Tempus Inc.
On Friday, the Commerce Department reported that U.S. retail
sales rebounded in October, but consumers cut back on purchases
of big-ticket household items and clothing, raising questions
about the consumer strength currently underpinning the U.S.
economy. That may have also contributed to the rise in the euro and
the pound.
"When we were looking at second-quarter numbers for Europe
and the United Kingdom, those numbers were very worrisome, but
that now we're looking at the third-quarter numbers, their
progress has been a little bit better and their pace has been at
expectation or beyond, whereas the United States has actually
slowed down," said Perez.
"The dollar is finally today reacting to those numbers and
saying the economic pace of the United States is not that
great."