(Updates prices, adds euro zone data, adds trade war detail)
* Dollar flat after mixed trade war messages
* Euro touches weekly low on euro zone flash PMIs
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Elizabeth Howcroft
LONDON, Nov 22 (Reuters) - The dollar was little changed on
Friday with currencies trading in tight ranges after mixed
messages from China about the trade war gave risk appetite only
a limited boost, while the euro touched weekly lows on inflation
data.
Against a basket of currencies, .DXY , the dollar hovered
around zero, heading for its smallest weekly change since the
start of August this year.
MUFG currency analyst Lee Hardman wrote in a note that low
volatility and tight trading ranges are currently the key
characteristics of the FX market.
Volatility for major currencies has rarely been lower.
The Swiss franc was down around 0.1% against both the dollar
CHF=EBS and the euro EURCHF=EBS , suggesting market optimism
as the Swiss franc is perceived as a safe-haven currency.
The Japanese yen - also seen as a safe haven - was up less
than 0.1% against the dollar JPY=EBS .
But the trade-exposed New Zealand dollar was up 0.2% against
the U.S. dollar NZD=D3 and the Australian dollar also lifted
slightly AUD=D3 .
EUROPEAN DATA
The euro, which had been up as much as 0.3% versus the
dollar in early London trading, turned negative and touched a
weekly low after euro zone flash PMI data fell short of
expectations. It was last at zero net change against the dollar, at
$1.10585 EUR=EBS .
Markets were unmoved by Christine Lagarde's first policy
speech as president of the European Central Bank. German third quarter GDP data held no surprises, showing
that exports, state spending and consumers helped the German
economy avoid a recession. "Unless global uncertainties are lifted, which are weighing
down on the manufacturing sector, it is only a question of when,
not if, the weakness in manufacturing spreads to the rest of the
economy," Daria Parkhomenko, forex strategy associate at RBC
Capital Markets, wrote in a note to clients.
TRADE WAR DRAGS ON
Chinese President Xi Jinping said Beijing wants to work out
a deal with Washington and has been trying to avoid a trade war
- but is not afraid to retaliate when necessary. The Chinese president called for strengthened communication
with the United States. A senior Chinese diplomat urged the United States to
compromise in order to develop stable relations between the
countries, saying that some U.S. politicians were trying to push
the countries into confrontation. After a week of mixed signals over the likelihood of a
preliminary trade deal, the latest developments did little to
move markets.
"While there are many trade headlines over the past few
days, one can also argue that this is actually a 'status quo',"
Commerzbank FX and EM analyst Hao Zhou wrote in a note to
clients.
"At the end of the day, there is little progress on trade
talks, and it looks like both sides are fine with another delay
of the phase 1 deal."
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dollar weekly change https://tmsnrt.rs/37tO5lZ
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