FOREX-Dollar firm as 'headline ping-pong' revives trade optimism

* Upbeat Trump comments reverse trade pessimism
* Kiwi hits 4-month high as rate-cut expectations ebb
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Westbrook
SINGAPORE, Dec 5 (Reuters) - The dollar and export-oriented
currencies found support on Thursday as upbeat trade comments
from U.S. President Donald Trump cheered the market, while New
Zealand's softer-than-expected banking reforms pushed the kiwi
to a four-month high.
The flight to safety seen on Wednesday reversed after Trump
said trade talks with China were going "very well," a day after
floating the idea that a deal might have to wait until after the
2020 presidential election. Bloomberg also reported that the two sides are moving closer
to an agreement, citing people familiar with the talks.
That took the shine off the safe-haven yen and Swiss franc,
which nursed losses on Thursday.
"Another day, another reversal of what happened the previous
day," said National Australia Bank's head FX strategist, Ray
Attrill.
"I thought the markets had stopped playing headline ping-
pong on trade, but evidently not."
Despite the swing, prevailing caution about high level
comments on trade kept market moves modest. The U.S. dollar held
overnight gains against the safe-haven Japanese yen and Swiss
franc to sit at 108.79 yen JPY= and 0.9877 francs CHF= . It
was steady on the euro at $1.1082 EUR= .
Against a basket of currencies .DXY the greenback held at
97.588.
The British pound GBP= crossed the $1.31 mark for the
first time since May overnight as expectations that Prime
Minister Boris Johnson would win a majority at next week's
election firmed. Sterling last traded at $1.3108. The Australian dollar
AUD=D3 slipped 0.2% to $0.6838 after softer-than-expected
retail sales data.
The standout was the kiwi NZD= , which rose 0.4% to
$0.6555, its highest since August, and has put on more than a
cent this week as business sentiment there has rebounded and
expectations for monetary loosening have fallen.
The Reserve Bank of New Zealand lifted bank capital
requirements, but not as much as some investors had feared, and
with a long lead time, reducing expectations that monetary
easing might be needed to offset the hike's tightening effects.
Against the Aussie, the kiwi has gained more than 3% in a
month to stand at a four-month high of NZ$1.0457 per A$1
AUDNZD= .
The long, seven-year phase-in and modest scale of hiked bank
capital rules were seen having a softer impact on lending and
growth than expected, reducing the likelihood of deeper monetary
easing.
The country's biggest lender, Australia and New Zealand
Banking Group, trimmed its expectations for cuts to the
country's Official Cash Rate (OCR) next year from two reductions
to one after the capital requirements were announced.
"A softening in the proposals, combined with a more positive
domestic outlook...mean we are changing our OCR call to only one
further 25bp OCR cut, in May next year, taking the OCR to
0.75%," ANZ analysts said in an emailed note.
The Canadian dollar CAD= hit a one-month high of $1.3203
per greenback after the country's central bank held interest
rates steady and said there were signs the global economy was
stabilising. A rise in oil prices also supported the exporter's currency,
and lifted the Norwegian krone NOK= slightly to 9.1622 per
dollar. O/R