FOREX-Dollar higher against euro, yen; Brexit drama whipsaws sterling

(Recasts, adds analyst quotes, updates prices)
By Kate Duguid
NEW YORK, May 21 (Reuters) - The U.S. dollar was higher
against the euro and the yen on Tuesday in a day of risk-on
trades after U.S. President Donald Trump temporarily eased curbs
on China's Huawei Technologies Co Ltd.
Wall Street and Chinese equities and emerging market
currencies were all boosted by Trump's decision, which
alleviated investor concerns about pressure on corporate results
in the sector.
"In general it has been a risk-on day," said Greg Anderson,
global head of foreign exchange strategy at BMO Capital Markets.
Trump added Huawei HWT.UL to a trade blacklist last week,
leading several companies to suspend business with the world's
largest telecoms equipment maker, which could weigh on their
sales. Chipmakers, many of which sell to Huawei, bore the brunt
of Monday's sell-off. But late on Monday, the United States
granted Huawei a license to buy U.S. goods until Aug. 19.
Some analysts, however, warned that the relief could be
temporary.
"Asian equity markets reacted positively to the news, but
there should only be limited follow-through, as uncertainty
remains high, and this uncertainty may potentially prompt
companies to cut back on existing capex plans," wrote Hans
Redeker, global head of foreign exchange strategy at Morgan
Stanley.
Against the Japanese yen JPY= , the U.S. dollar was half a
percent stronger, last at 110.59 yen. The dollar index .DXY
which measures the greenback against a basket of six rivals, was
0.12% higher, last at 98.051.
Against the euro EUR= , the dollar was up 0.1%, last at
$1.116. The single currency is being hurt by dollar strength and
by the upcoming European parliamentary elections in which
euroskeptic parties may fare well.
The dollar was also stronger against the pound GBP= , which
boomeranged on developments in Britain's plan to leave the
European Union.
Prime Minister Theresa May set out a "new deal" on Tuesday
for Britain's departure from the EU, offering sweeteners to
Parliament including the chance to vote on whether to hold a
second referendum to try to break the impasse over Brexit. The
pound initially jumped on the news, then gave up the gains after
it became clear that Parliament - which thus far has opposed a
second public vote - would have to back any new referendum.
"I don't think there's any way that passes through
parliament," said Anderson. "Unless something changes
dramatically, the votes aren't there."