FOREX-Dollar holds gains vs yen, jitters prevail ahead of G20

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* FX markets jittery on G20-related headlines
* U.S.-China talks at G20 seen having large impact on Fed
policy
* Oil rally lifts Canadian dollar to near 5-month highs

By Shinichi Saoshiro
TOKYO, June 27 (Reuters) - The dollar hovered near a
one-week high against the yen on Thursday, propped up by hopes
of Sino-U.S. trade talk progress though investors were
nonetheless cautious ahead of a meeting between leaders of the
two powers in Japan in days ahead.
The greenback was little changed at 107.730 yen JPY= ,
having risen about 0.6% overnight to 107.850 yen, its highest
since June 20. The U.S. currency was supported by comments from
U.S. Treasury Secretary Steven Mnuchin that the trade deal
between the United States and China is "about 90%" complete.
Mnuchin's comments were later restated to show he was using
the past tense to describe progress in the U.S.-China talks
though the cautious optimism remained intact. "As the yen's moves on the Mnuchin comments show, the market
is likely to react nervously to headlines related to the G20
summit," said Masafumi Yamamoto, chief forex strategist at
Mizuho Securities.
U.S. President Donald Trump and Chinese President Xi Jinping
are due to meet at the June 28-29 G20 summit in Osaka. Investors
are focusing on whether the two leaders can pave the way to
resolve a trade dispute between the world's two biggest
economies. The potential implications of the Trump-Xi meeting for U.S.
monetary policy are huge, Yamamoto at Mizuho Securities said.
"If the two sides agree not to impose more tariffs, the Fed
would no longer need to cut rates," he said. "On the contrary,
if the talks point to the imposition of more tariffs, that could
nudge hesitant policymakers towards rate cuts."
The dollar has taken a hit over the past week - it reached a
six-month low of 106.780 yen on Tuesday - after the Federal
Reserve opened the door to possible monetary easing in the
coming months.
The dollar index .DXY against a basket of six major
currencies was a touch lower at 96.196 after rising modestly the
previous day.
The index had retreated to a three-month low of 95.843 at
the start of the week amid the Fed's easing prospects. But it
has managed to regain some traction after comments this week
from central bank officials such as Chair Jerome Powell that
tapered aggressive rate cut expectations.
The euro EUR= was steady at $1.1369 after inching up 0.05%
on Wednesday.
The Canadian dollar was on a bullish footing as crude oil's
surge supported commodity-linked currencies.
The loonie traded at C$1.3124 per dollar CAD=D4 after
advancing overnight to C$1.3108, its strongest since early
February.
Oil prices surged as U.S. stockpiles of crude and refined
products decreased. O/R
The New Zealand dollar NZD=D4 traded near a two-month peak
of $0.6693 scaled on Wednesday, when the currency bounced after
the Reserve Bank of New Zealand refrained from lowering rates.
The Australian dollar AUD=D4 was close to a 2-1/2-week
high of $0.6995 brushed the previous day.

(Editing by Sam Holmes)