FOREX-Dollar jumps vs yen as risk appetite returns on U.S.-China trade deal hopes

* Trump says U.S. and China 'very close' to trade deal
* Euro about flat after ECB meeting
* Sterling eases as voting gets underway

(Recasts throughout, updates rates, adds comments post-U.S.
market open; new byline, changes dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Dec 12 (Reuters) - The dollar jumped against the
safe-haven Japanese yen on Thursday after U.S. President Donald
Trump said the United States was "very close" to nailing down a
trade deal with China, just days before new U.S. tariffs on
Chinese imports were due to be imposed.
"Getting VERY close to a BIG DEAL with China," Trump posted
on Twitter.
Trump was expected to meet with his top trade advisers on
Thursday to discuss the Dec. 15 tariffs deadline, sources have
told Reuters. Against the Japanese yen, which tends to draw investors
during times of geopolitical or financial stress as Japan is the
world's biggest creditor nation, the dollar rose 0.55% to
109.14, a near one-week high.
Against the offshore Chinese yuan, the dollar fell 0.69% to
a one-month low.
"We have seen a strong risk-on reaction in the FX markets,"
said Vassili Serebriakov, an FX strategist at UBS in New York.
Serebriakov, however, cautioned about putting too much stock
in the trade-related headlines.
"It is still too early. We have to see whether this is
delivered or not," he said.
The dollar was also supported by a Wall Street Journal
report which said U.S. negotiators have offered to slash
existing tariffs by as much as half on $360 billion of
Chinese-made goods and cancel the new round of levies slated to
take effect Sunday.
The dollar index .DXY , which measures the greenback
against six major currencies, was up 0.28%.
Thursday's strength helped the dollar reclaim most of the
ground lost on Wednesday after the Federal Reserve held interest
rates steady and said a significant, persistent inflation rise
would be needed to hike rates again. The euro was about flat on the day after the European
Central Bank maintained its ultra-easy monetary policy at
Christine Lagarde's first meeting in charge on Thursday, while
the pound eased ahead of the outcome of the UK election.
"It's pretty much a status quo in many ways," said Brad
Bechtel, managing director FX at Jefferies in New York.
The British pound stepped back from a near nine-month high
on Thursday as investors booked profits from a recent rally in
case of a surprise UK election outcome later in the day.
Sterling was 0.55% lower against the dollar. Voters were heading to the polls in an election that will
pave the way for Brexit under Prime Minister Boris Johnson or
propel Britain toward another referendum that could ultimately
reverse the decision to leave the European Union.
Voting ends at 2200 GMT (5 p.m. ET), with exit polls and
early results due after that. Traders expect an outcome as early
as 0300 GMT on Friday (10 p.m. ET on Thursday).

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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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